A 'financial system' is a system that allows the exchange of funds between lenders, investors, and borrowers. Financial systems operate at national and global levels. ... Money, credit, and finance are used as a medium of exchange in financial systems.
The role of the financial system is to gather money from businesses and individuals who have surplus funds and channel funds to those who need them. The financial system consists of financial markets and financial institutions. ... List the two ways in which a transfer of funds takes place in an economy.