Financial Services

Financial services are the businesses and operations that put money to work in the economy. They include a wide range of businesses, from depository organizations (banks and credit unions) that accept savings deposits and pay interest to lending institutions that extend credit to individuals and firms. They also include brokerages, insurance companies, pension funds, and mutual fund companies. The sector also includes debt resolution services, global payment systems such as Visa and MasterCard, and financial market utilities that facilitate stock, commodity, and derivative exchanges and transactions.

Without a robust financial services sector, people wouldn’t be able to put their money to use. Instead of stashing cash under their mattresses, savers would have no way to invest it. And borrowers would have a hard time finding those willing to lend them money at reasonable rates. Financial services provide the intermediary functions that enable people to put their money where it’s most productive—whether by investing in the next great technology or by purchasing goods and services that improve their lives.

A strong, stable financial services industry is crucial to a country’s economy. It provides the confidence that consumers need to spend, and it helps small businesses and larger corporations grow and hire more workers. A healthy financial services industry also means that people can count on their retirement accounts and life insurance policies to be there when they need them. And, of course, it gives people a sense of security that they can afford to cover unexpected expenses and emergencies.

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