Financial institutions refer to financial intermediaries engaged in the financial service industry and are part of the financial system, including consumer finance companies, banks, securities companies, insurance companies, trust investment companies, and fund management companies.
Financial institutions can be divided into the following three categories according to their functions:
1. Central Bank. The central bank is the dominant financial center institution in the country, responsible for formulating and implementing the national monetary credit policy, having the exclusive right to issue currency, and implementing financial supervision.
2. Banking financial institutions. Banking financial institutions refer to financial institutions that absorb public deposits, issue loans, and handle settlements and other businesses. Including policy banks, commercial banks, village banks, rural credit cooperatives, and urban credit cooperatives.
3. Non-bank financial institutions. Non-bank financial institutions refer to financial institutions other than central banks, commercial banks and specialized banks. It mainly includes consumer finance companies, insurance companies, securities companies, etc.
In addition, according to the management status of financial institutions, financial institutions can also be divided into financial supervisory institutions and financial enterprises under supervision. For example, the People’s Bank of China, the China Banking and Insurance Regulatory Commission, and the Securities Regulatory Commission are the institutions that exercise financial supervision power on behalf of the state, and all other financial enterprises such as banks, securities companies, and insurance companies must accept their supervision and management.
