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Each day the financial system
settles millions of transactions,
including spending in the
shops and online, payment
of bills, wages, benefits and
withdrawals from high-street
cash machines.
The total amount of money passing
through UK payment systems is
enormous, with a value of over
£230 billion every single day.
In a world without payment
systems every transaction – even
the purchase of a house – would
have to be paid by handing over
cash!
Insurance companies allow
people to insure against the
risks they face in their
businesses or daily lives.
Many worthwhile opportunities
would be overlooked without the
protection of insurance, which
allows businesses to expand
with more confidence and the
economy to grow.
The financial system brings
savers and investors together
to put money to work.
One person’s savings in a bank
can become the investment in a
business that will create new jobs,
or a mortgage for house purchase.
And savings can be invested in
shares by pension funds to allow
firms to grow.
If a large bank or insurer gets
into serious difficulties,
problems can spread rapidly
across the financial system.
Before long, even healthy banks
can be starved of cash and the
whole financial system can get
into trouble.
BUILDING
SOCIETIES
Central banks and regulators
work to keep the financial system
stable.
A stable financial system means
households and businesses can
have confidence their money
is safe, insure against risk and
rely on access to finance when
they need it – in good times and
in bad.