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Fundamental functions of the financial system and regulation

Author(s): Emilios Avgouleas

Institution: University of Manchester

Date produced: 2011

The operation of the financial system serves a host of very important economic functions. On the one hand, savers deposit their surplus money with banks. On the other hand, private and public actors can finance, by means of bank loans, their consumption and investment needs. For this reason the sound and safe operation of the banking system is of strategic importance not only in fostering economic development but also in ensuring social and economic stability.

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