Definition

Noun: An organization, which may be public or private, whose core business involves accepting monetary deposits and other funds from individuals or other entities and channeling those funds into financial investments, loans, and other monetary assets.

Usage

This term refers to the formal category of businesses that operate within the financial system. It is a standard term in economics, business, and regulatory contexts. - A bank is the most common type of financial institution. - Regulators oversee the activities of all major financial institutions. - The new law affects every financial institution in the country.

Advanced Usage

• Systemically Important Financial Institution (SIFI): A designation for a bank or other financial institution whose failure might trigger a financial crisis.
  • The government closely monitors systemically important financial institutions.
• Non-bank financial institution (NBFI): An entity that provides financial services but does not hold a banking license (e.g., insurance companies, investment funds).
  • Hedge funds are a type of non-bank financial institution.

Variants and Related Words

• Financial intermediary: A broader term for any institution that acts as a middleman between savers and borrowers, which includes all financial institutions.
• Depository institution: A specific type of financial institution, like a bank or credit union, that is legally allowed to accept monetary deposits from customers.
• Institutional investor: A large organization, such as a financial institution, that invests substantial sums of money on behalf of others.

Synonyms

• Banking institution
• Monetary institution
• Financial intermediary

Related Phrases

• Financial services sector: The entire industry comprised of financial institutions and related companies.
  • He works in the financial services sector.
• Institutional banking: Banking services provided to other large organizations and financial institutions, rather than to individual consumers.
  • Their institutional banking division handles large corporate loans.

Noun

1. an institution (public or private) that collects funds (from the public or other institutions) and invests them in financial assets