Balance Sheet and Regulatory Features Paper

fiscal cosmoss lead a wide array of attends that vary in term of trans enactmentions, clients, packaging, volume and other parameters. Among them be the investment securities firms, banks and insurance companies. In general, they every last(predicate) perform the essential function of channeling gold from those with surplus funds to those with shortages of funds (Saunders & Cornett, 2003). Then as they progress with their respective financial products, services, and rear markets, then their roles in the financial world become more app atomic number 18nt. investiture Securities FirmsInvestment securities firms act as brokers and sell securities such as company stocks, commercialized papers and promissory notes as well as government-issued treasury bills. They back up individuals who exigency to purchase new or existing securities issues or who want to sell previously purchased securities (Melicher & Norton, 2003). Full service of these firms for individual clients w ould allow in doing research on securities available for them to invest in and rendering informative services by giving clients timely information and recommendations based on it (Saunders & Cornett, 2003).These they do also for corporate clients that park some of their wakeful company funds in securities both fixed-income securities and stocks. These firms charge commission and service fees for their services, and this is basically how they generate their income. Depository Institutions While investment securities firms are non-depository institutions, those that are designated as depository institutions can accept deposits from retail savers. They include banks, nest egg institutions and credit unions (Saunders & Cornett, 2003).While non-depository institutions plainly act as intermediaries of funds from the sources (the investors and the savers) to the users (the companies needing extra working capital to fund their operations, etc. ), depository institutions can act both as intermediaries and as custodians of the coin entrusted to them. When an investor goes to an investment securities firm to both buy stocks or to put some money in commercial papers, they know that their money is placed in the company that issued the securities (stock or debt instruments).They bequeath therefore be concerned with the financial well-being of the securities issuer, and not so much the investment securities firm. This is because the company primarily amenable for the safety of the protect and the income of their money is the same company that issued the securities they invested in. In contrast, when an investor goes to a depository institution like a bank to leave their money there for guardianship until they would need to use it or to invest it elsewhere, the same investor is placing his trust and self-assurance in the depository institution.He, therefore, believes that the institution is financially sound and that putting his money in their custody is a safe move. The institution, in turn, accepts the deposits and pedestals to be responsible for them. In behalf of their depositors, then, they invest the pooled deposits elsewhere and lend them to qualified borrowers. Financial Intermediaries Financial intermediaries generally include banks, investment securities firms, investment banks, insurance companies and pension funds.They are grouped into three categories the depository institutions (banks), the contractual savings institutions (insurance companies) and investment intermediaries (mutual funds). These entities stand between the lender-savers and the borrower-spenders and facilitate the transfer of funds from one to the other. (Mishkin, 2001) They receive money and pass them on as investments, subject to their respective agreements or operation contracts with their clients.