Financial institutions include banks, credit unions, asset management firms, building
societies, and stock brokerages. These institutions are responsible for distributing financial
resources in a planned way to the potential users. There are a number of institutions that collect
and provide funds for the necessary sector or individual. On the other hand, there are several
institutions that act as the middleman and join the deficit and surplus units. Investing money on
behalf of the client is another of the variety of functions of financial institutions.
Financial institutions can be categorized as follows:
• Deposit Taking Institutions
• Finance and Insurance Institutions
• Investment Institutions
• Pension Providing Institutions
• Risk Management Institutions
At the same time, there are several governmental financial institutions assigned with
regulatory and supervisory functions. These institutions have played a distinct role in fulfilling
the financial and management needs of different industries.
Deposit taking financial organizations are known as commercial banks, mutual savings
banks, savings associations, loan associations and so on.
The primary functions of financial institutions of this nature are as follows:
• Accepting Deposits
• Providing Commercial Loans
• Providing Real Estate Loans
• Providing Mortgage Loans
• Issuing Share Certificates
Financial institutions
There are many important financial institutions which provide finance for companies.
These institutions provide money in different ways.
Banks Although banks specialize in supplying short-term loans; they are prepared to
make loans for longer periods – up to 20 years in certain circumstances.
Insurance companies The regular premiums paid by policyholders are invested in
government securities, company shares, land, and property of all kinds. The income from these
investments makes it possible for insurance companies to pay out interests which are greater than
the total payments made by policyholders.
Pension funds Although in many countries there is a state pension scheme to which all
workers contribute, a large number of employed and self-employed people also belong to private
pension schemes. The money which accumulates in these pension funds is invested and works in
a very similar manner to the funds of insurance companies.
Investment trusts These are limited companies buying shares in other companies which
they believe will be the most successful ones. People who then buy shares in investment trusts
are paid dividends and investment funds obtain a profit too.
Unit trusts These operate in a very similar manner to investment trusts. But they are not
limited companies – they do not issue shares, they issue units. These units cannot be re-sold on
the open market, but they can be sold back to the unit trust at any time.
Finance houses These institutions provide the loans which finance hire-purchase
schemes and leasing arrangements. Firms which sell goods on hire-purchase or who lease goods
do not have to wait two or three years before their goods are fully paid for. They receive
immediate payment from a finance hours, and it is the finance house which collects the regular
installments paid by the purchaser. There are many other specialist financial institutions which
provide finance for companies. Besides in many countries a government is an important source
of finance for privately-owned firms.
4. Найдите в тексте и напишите следующие выражения:
a. депозитные учреждения известны как коммерческие банки
b. финансовые учреждения отвечают за распределение финансовых ресурсов
c. основные функции финансовых учреждений
d. предоставление ипотечных кредитов
e. учреждения пенсионного обеспечения
f. вложение денег от имени клиента
g. выступать в качестве посредник

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