Richard A.

Faison

HRM4A

Financial System is the system that allows the transfer of money between savers (and investors) and borrowers. A financial system can operate on a global, regional or firm specific level. Gurusamy, writing in Financial Services and Systems has described it as comprising "a set of complex and closely interconnected financial institutions, markets, instruments, services, practices, and transactions." According to Franklin Allen and Douglas Gale in Comparing Financial Systems: "Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial systems of most developed economies. Yet the form of these financial systems varies widely."

THE PHILIPPNE FINANCIAL SYSTEM

THE STRUCTURE OF THE PHILIPPNE FINANCIAL SYSTEM FNANCIAL SYSTEM a network that generates, circulates, and controls money and credit. SURPLUS INCOME refers to the excess incomes of an individual. OBRAS PIAS the first credit institution in the Philippines; started by Fr. Juan Fernandez de Leon in 1754 and ended in 1820. BANCO ESPAOL Filipino de Isabella II the First Philippine Bank establish in 1851 FIRST AGRICULTURAL BANK OF THE PHILIPPINES established n 1906 and in 1916 all of its asset and liabilities were transferred to the newly organized PNB.FNANCIAL MARKET are physical locations or electronic forums that facilitate the flow of funds among investors, businesses and governments. It provides the mechanism for allocating financial resources of funds from savers to borrowers.

ROLES OF THE FNANCIAL MARKET: 1.Money market operation 2.Expedites the transaction of financial claims 3.Serves as a mean of bringing the forces of demand and supply of financial claims 4. Facilitates the flow of funds among investors, business, and governments. 5.Provides the mechanisms for allocating financial resources or funds from savers to borrowers. 6.Raises money by selling shares to investors and its existing share can be bought or sold. 7.Where lenders and their agents can meet borrowers. 8.Convenes many interested sellers in one place. 9.Provides the place where many commodities are traded. 10.Used to match those who want capital to who have it. 11.Facilitates: The raising capital in capital markets The transfer of risk in the derivatives market International trade in the currency market 1942 PNB closes its doors because of the coming of the Japanese imperial Forces. Rehabilitation Finance Corporation formed in 1946 to provide credit facilities for the rehabilitation of agricultural, commerce and industry reconstruction of war-damaged properties and later become the Development Bank of the Philippines. Offshore Banking Units any branch, subsidiary of affiliate of Foreign Banking Corporation that conduct banking transactions in foreign currencies.

Bibliography: http://www.scribd.com/doc/17632597/The-Philippine-Financial-System-An-Overview http://en.wikipedia.org/wiki/Financial_system