What are the functions of financial institutions?

The functions of financial institutions are these five:

1, provide payment and settlement services: for example, bank draft payment is.?

2, financing funds: that is, the bank as the depositor's money to lend to enterprises or individuals, forming a bank loan.?

3, reduce transaction costs and provide financial convenience: for example, large- denomination payment, with cash is very inconvenient and unsafe, with bank transfers safe and convenient, is financial convenience.?

4, improve information asymmetry: private borrowing, often lenders do not understand the borrower. And the bank has a more complete credit rating system, you can clearly understand each borrower's credit and financial status.

5, risk transfer and management: banks can handle commercial paper discounting business, if it is non-recourse discounting, then the risk of commercial paper is transferred from the enterprise to the bank.