Legal Definitions - financial institution

A financial institution is a type of organization that primarily deals with financial and monetary transactions. This includes loans, deposits, investments, currency exchange, and other similar transactions. Examples of financial institutions include:

• Commercial banks
• Trust or insurance companies
• Credit unions
• Finance companies
• Securities firms
• Leasing companies

Financial institutions can be private or public, national or international. They are a major component of the financial services sector. There are two main types of financial institutions:

• Banking financial institutions: These include commercial banks that deal with loans, deposits, and everyday banking transactions.
• Non-banking financial institutions: These include investment banks, insurance and leasing companies that provide specialized and technical services.

International financial institutions (IFI) are important on the global stage because they establish a framework for the development of financial and monetary rules and provide financial and technical support for economic development. Examples of IFIs include:

• International Monetary Fund (IMF)
• International Bank for Reconstruction and Development (IBRD)
• International Finance Corporation (IFC)
• International Centre for Settlement of Investment Disputes (ICSID)
• World Bank
• European Investment Bank
• Islamic Development Bank
• Asian Development Bank
• CAF – Development Bank of Latin America
• African Development Bank

State laws regulate financial institutions.

Overall, financial institutions play a crucial role in the economy by providing financial services to individuals, businesses, and governments.