Fundamentals of financial institutions within financial markets

“Emphasize fundamentals of financial institutions within financial markets? Outline the role of financial intermediates and how important to financial systems?”. Discuss (150 Words)

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Fundamentals of financial institutions within financial markets

A financial intermediary is a firm or an institution that acts as an intermediary between a provider of service and the consumer. Financial intermediaries serve as middlemen for financial transactions, generally between banks or funds. These intermediaries help create efficient markets and lower the costs of doing business. For example, a financial advisor connects with clients through purchasing insurance, stocks, bonds, real estate, and other assets. Financial intermediaries offer the benefit of pooling risk reducing cost, and providing economies of scale, among others. They reduce the costs of the many financial transactions an individual investor would otherwise have to make if the financial intermediary did not exist.

micals and has agreed to implement Globally Harmonized System of Classification and Labelling of Chemicals, working with the UN. This is a step forward, however more emphasis must be placed on market-based instruments (MBIs) to prevent high levels of pollution, rather than mere registration and authorisation of chemicals as they are still causing severe health problems.

Market based instruments in China
The government have been making progress to improve the quality of the water in The Peoples Republic Of China. China’s tenth and eleventh five-year plans entailed the governments intentions in controlling water pollution. The government did invest into water pollution technologies, between 2000 and 2008, pollution control investments grew by 420%, this shows tangible efforts in cleaning up China’s water. Command and control instruments are central to water pollution and control policy. Examples of command and control policies which they use include discharge permits, the application of discharge standards and total load control. Although command and control instruments such as these achieve results, there are problems. There is little use being made of incentive based or voluntary policies. The current policies do not put enough attention on the prevention and management, rather they emphasize pollution control. The precautionary principle should be applied by policy makers in China, rather than polluting first and cleaning up later, much more should be done to prevent rather than end-of-pipe strategies. To address the growing problems of water pollution, more attention on market-based instruments are needed from China’s government. Looking at international market-based instruments, China’s water system may benefit from water quality trading: this is similar to emissions trading, where pollution control becomes something of a market within itself.

Rising Sea Levels
Increases on a global level in greenhouse gas emissions contribute to climate change and as a result, rising sea levels mean that the future of low-lying states and islands is alarming. ‘Rising global sea level is likely to accelerate through the twenty-first century with a rise of 18-59cm above 1990 levels projected by the end of the century’ (Meehl et al. 2007). This in turn will cause food and water insecurity, pose a threat to human safety and national security will be affected. Ha’ofa’s ‘Sea of Islands’ thesis is about the ‘resilience and adaptive capacities of island communities that leverage global networks in the face of local environmental devastation.’ (Lazrus, 2012) A sea level rise of just one metre could mean the loss of the entire land area (MHAHE, 2001). Severe beach erosion and fresh water s

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