2.1 Financial Institutions
LG1
Most successful firms have ongoing needs for funds. Financial institutions serve as intermediaries by channeling the savings of individuals, businesses, and governments into loans or investments. Many financial institutions directly or indirectly pay savers interest on deposited funds; others provide services for a fee (e.g., checking accounts for which customers pay service charges). Some financial institutions accept customers’ savings deposits and lend this money to other customers such as firms, others invest customers’ savings in earning assets such as real estate or stocks and bonds, and still others do both. The government requires financial institutions to operate within established regulatory guidelines. ...
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