Contents

• Executive summary
• Introduction
• Actuarial Risk
• Informational efficiency
• Time Preference
• Risk Distribution
• Diversification of risk
• Functions of Financial Intermediaries
• Conclusion
• References

Description

Financial institutions are the back bone of the nations economical growth as they help in regulating the funds effectively. Many complex models have been developed to give an idea about the channels by which the financial markets could be developed. They help in facilitating the pooling of risks by bringing together a group of investors to invest in an organization, allocating the resources effectively for the best optimum output, diversifying the risks by making the investors to invest in various organization rather than in one of them, managing the financial controls and also mobilization of the savings. Hence in order to obtain the balance in the economy of the nation, the financial structural framework is to be effective in which the financial institutions play a greater role.