Within a nation, the financial or finance system, and the one that is responsible for managing the inflows and outflows of money, using a series of institutions and public bodies for this. This, in addition, is responsible for facilitating and providing security to the movement of money and the payment system. This part of finance, a branch of the economy, in which the various exchanges of goods that occur between individuals, companies and States are studied, in addition to all the factors that this process surrounds; in the same way, transactions (sale of goods) and the administration of monetary funds are closely related to the system.
The system is made up of certain elements. One of them is financial assets, those securities of value issued by financial institutions of expenditure; These, unlike real assets, are not in the power to increase the wealth of the State, but they do help them to increase and that they can circulate freely. These consist of three main characteristics: liquidity (speed of sale in the market), risk (it is the solvency of the person issuing the asset) and profitability (the interest of the person who now owns the asset, with respect to risk). The financial markets, meanwhile, are the mechanisms through which can be exchanged financial assets.
There are a series of organizations that are in charge of regulating the financial system, that are in charge of enforcing the laws that are drawn up, with respect to this sector, in addition to certain regulations imposed by the sector. Intermediaries, for their part, are those who are in charge of transforming assets; They do this by connecting individuals with financial power and companies that need it. Thus, they ensure that the constant transformation that characterizes the mechanism.
