Financial Institutions- The world of numbers

The field of financial institutions covers the economics of the contingent claims. Financial economists study the valuation of these claims, the markets in which they are traded, and their use by individuals, corporations, and the society at large.An entity whose income exceeds its expenditure can lend or invest the excess income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary, such as a bank or buy notes or bonds from the bond market. The lender receives interest, the borrower pays a higher markup than the lender receives, and the financial intermediary pockets the difference.

Financial institutions also include banks which provide finance to the consumers. The finance includes many types such as personal finance, corporate finance, mortgage finance, and loan.Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal financial decisions may also involve paying for a loan. 

Managerial or corporate finance is the task of providing the funds for a corporation's activities. For small business, this is referred to as SME finance. It generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock. Long term funds are provided by ownership equity and long-term credit, often in the form of bonds. The balance between these forms the company's capital structure. Short-term funding or working capital is mostly provided by banks extending a line of credit. Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value. In investment management -- in choosing a portfolio -- one has to decide what, how much and when to invest.

A mortgage is a contract in which real or personal properties are pledged as security for the performance of an obligation, usually the payment of a debt. Mortgage is a type of secure loan in which many documentations are required to be on safe side in future, now a day’s many financial institutions such as banks are providing mortgage facility to the consumers by which customers are taking full advantages and made easier way for people to get financial support in buying, building or renovating homes along with this people are taking financial support for their businesses by availing such facilities. One way or other these financial institutions made life of consumers easier than ever before.