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Difernce Between Central Bank and Commercial Bank and The Definitions.

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Commercial banks and central banks can be defined in terms of their functions. According to Vera Smith, who stated that the primary definition of a central bank is a banking system in which a single bank has either complete control or a residuary monopoly of note issue bank has issue banks. Also W.A Shaw defines a central bank as a bank that controls credit. TO Hawtrey, a central bank is the lender of the last resort in a country. According to Sayers, the central bank is the organ of government that undertakes the major financial operations of the government and by its conduct of these operations and by other means, influences the behavior of financial institutions to support the economic policy of the government. photo credit: istockphoto.com On the other hand, Commercial Banks can be defined as profit-making institution that accepts deposits and advances loans to their customers. The difference between commercial banks and central banks is so explicit that a layman can understand it.
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The Components of the Financial System_ Finance Tips

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The financial system comprises institutions that can be identified or classified in many ways. This can either be by your generic names, for example, Central Bank, Commercial Banks, Merchant banks, Non-Bank financial institutions, the financial market, or by the way they are funded and also by their function, which we will discuss later in this article. For instance, we have the deposit financed institutions, that's those that obtain funds through deposits, these institutions are; the commercial banks, merchant banks, and savings banks, and also the non-deposit financed institutions, which are those that obtain funds but do not through the deposit, within this group, there are institutions financed by Contractual savings such as insurance companies, pension, and provident funds; investment companies, whose fund come from unit trusts, shares, and bonds, it also comes as government subvention. The current example in Nigeria includes national development banks such as the Nigerian I
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Here Are The Relevance /Importance of The Cricular Flow of Money.

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In the modern economy, money is a form of the living hood, and the circular flow gives a clear picture of the economy. The government, business firms, and consumers can detect whether the economy is working strongly or has a problem by looking at the circular flow of money. We are going to discuss the importance of the circular flow of money in every country's economy. 1. It creates a network of markets: The producers and consumers connect through the circular flow of money because it helps to create a network for different goods and services, where the problem related to their sales and purchase are looked into. The network they share makes it easier to answer their numerous questions.                                                     photo credit:istockphoto.com 2. Basis Multiplier: When leakages exceed injections in the circular flow of money, the total money supply becomes less than the total output. This leads to a cumulative decline in employment income, output, and
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These Are Unique Factors Tying All the Financial markets Together.

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  The financial market system has different segment that have a specific characteristics, these features are determined through the rules and regulation that guides them. In all these, when one segment is affected by interest rate and security price, other corner of the financial market will be affected, this shows that there are forces at work to tie all the parts of the financial markets together. 1. Speculation:  Demanders and supplier of fund seeks profits through joining element such as speculation and arbitrage. Now speculators in securities are continually on the lookout for opportunities to profits from the forecasts of future market development.    However, speculators perform an important role in the financial market, they level out the prices of securities, they also buy securities that are underpriced and sell those they view as overpriced. 2. Arbitrage:  This is the fund that are transferred from one market to another whenever the prices of securities in different markets
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Here are Functions Performed by the Global Financial System and The Financial Markets.

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 The function of global financial system are numerous, it’s part of our daily living activities and how we survive as a particular country. We have seven outstanding functions of global financial system, there are: 1.         Credit function: Credit comprises of a loan of funds which in return the debtor promised to repay the fund in the future. The global market make out fund for finance consumptions and investment spending. Businesses, individuals, federal government, and other needs credit for an easy living and execution of duties. The business stand in for credit to stock their warehouses, buy new equipment for production, meet payroll for their employees and construct new building for business and quit a lot of other things.   2.         Policy function: In this era, the government has form a policy through the financial market to stabilize and control the economy of the country in order to avoid inflation , by setting standard for interest rates and available credit for citizens
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The Outstanding Roles of Financial System in the Global Economy_ Finance Tips.

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Study objectives: The role of financial system in global economy. The role of market, meaning, types and Channel for saving and investment.   The roles of financial system ranges from moving loanable fund that are available to the people or areas that needs it, it facilitates the global economy so that the citizens of a country can live above poverty rates. However, Financial System is the assembling of people, institution, laws and regulations through which securities, such as stocks, bond, Treasury bill and others are traded in order to provide financial service and determine the interest rates. Financial system plays an important role in our lives, without it we would have lived in much an uncomfortable state. The global Economy    makes the flow of production stable, for an easy flow of payments, the standard of living of every citizens could fall flat if the loanable fund is costly or unavailable, this    shows how significant    the global Economic system and the close relationsh
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