Finance Home   Types of finance   Finance is a concept   Economics

Finance is a concept
Finance allows etymologically speaking to characterize what relates to the money of an allowance. The idea of allowance implies the idea here, to make decisions compared to placements or capital obtained in order to obtain the largest financial value from it. The concept of held richness returns initially to the nonmonetary elements such as health, happiness, which are elements to be developed. But that includes a priori also the financial investments such as the quota of the value of a firm for example. The relevance of the concept thus resides around the idea to find tools for optimization of financial flows by taking of account the complexity and the variety of the situations (skew of the behavioral finance, taken into accounts of the divergent interests of the recipients, limited rationality). Taking into account the extension of the convertibility of the currencies and universalization of the exchanges, finance is from now on international. The appearance of complex international financial products and not controlled operators acting starting from the tax shelters was largely associated with the development of the crisis of the financial markets which currently paralyzes the worldwide economy, raising the question of the implementation of reinforced world regulations. The financial system is international: it is present in each country, with flows circulating of the one with the other with however certain local restrictions. It gathers a set of actors, connected to each other by a communication network, forming a series of specialized financial markets aiming each one at balancing supply and in a particular financial credit. This balance is obtained by the confrontation of the orders between the various actors holders of average monetarists or financial and in particular: On the level of the financial institutions, the system understands the supranational Banks, the national Central banks, the trade banks, the finance companies, the pension funds, the social security and the contingency funds, the insurance companies, the Treasury, the financial markets. The superposition of the various financial markets (actions, interest rate, currencies and raw materials) and its extension to all the countries, form the international financial system. The financial system seeks to facilitate a good allowance of the capital, favorable to the economic advancement. This central role explains the important place of finance in the developed countries, with a share from 5% to 10% of the GDP (Gross domestic product).

All content © Copyright 2011 Search in Finance, all right reserved.