Financial systems can respond to 2 characteristics:
Based on the market and banking. A market, we refer to the set of sub-systems that make up the financial system (banking, insurance, banking, these institutions have the vast majority of financial assets and liabilities.) Some economists have raised the need to implement new ideas or systems It aims to unite both public and private financial systems, not only that but something very important, implement some sources, sub-systems to boost profits and decrease competition between private and public.
Competition for funding sources
The biggest claimant of financing is the State. Which gives rise to a competition between entrepreneurs and industrialists as it seeks to finance a growth of current public expenditure through savings in the hands of financial institutions. It is said that it has been easier for entrepreneurs and industries to buy government securities that guarantee high profitability with low monitoring and risk costs. That is why Venezuela financial intermediation rates have been below 50% for a certain time. So many private companies, such as small and medium-sized companies, fear becoming publicly traded companies, in the face of increasingly stifling regulation against private property.
Harmonize public objectives
Financial institutions are public agents, who manage and process information, reducing the asymmetry of information (means that one of the contractors may be better informed than their counterparty), being these agents take care of the entrepreneur or investor and saver who do not run This risk, timely and reasonable access to sources of financing is a fundamental factor when we refer to the opening of a company, expansion, and continuity of its economic and commercial activities, and in the creation of jobs. This is where the government It is responsible for meeting these objectives: 1) Ensure that financial institutions make decisions such as the granting of credit, that will not put the money of the saver or employer at risk, 2) Try to make access to financing as relaxed possible.
Harmonize public objectives
Financial institutions are public agents, who manage and process information, reducing the asymmetry of information (means that one of the contractors may be better informed than their counterparty), being these agents take care of the entrepreneur or investor and saver who do not run This risk, timely and reasonable access to sources of financing is a fundamental factor when we refer to the opening of a company, expansion, and continuity of its economic and commercial activities, and in the creation of jobs. This is where the government It is responsible for meeting these objectives: 1) Ensure that financial institutions make decisions such as the granting of credit, that will not put the money of the saver or employer at risk, 2) Try to make access to financing as relaxed possible.
Policies aimed at improving market failures:
https://ve.linkedin.com/company/international-financial-systems
https://en.wikipedia.org/wiki/Global_financial_system
