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Glossary Term: FINANCIAL INSTITUTION

Definition(s) for FINANCIAL INSTITUTION:


1. ) an entity or enterprise (e.g. bank) in which the main business and function is to collect money from the public and invest it in financial assets such as stocks and bonds.

2. ) An institution that uses its funds chiefly to purchase financial assets (loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue. See also depository institution.

3. ) An institution that uses its funds chiefly to purchase financial assets (deposits, loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue: nondeposit intermediaries include, among others, life and property/casualty insurance companies and pension funds, whose claims are the policies they sell, or the promise to provide income after retirement; depository intermediaries obtain funds mainly by accepting deposits from the public. See also Bank, Savings Bank.



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