Abstract
Financial systems bring fund demanders and fund suppliers together. Therefore, with the help of these systems, fund suppliers can earn interest income by using their savings. On the other hand, fund demanders can find money they need so that they can make their investments more easily. Since the investment increase leads to higher GDP, it can be said that effective financial systems make an important contribution to the economic improvement of the countries. Therefore, to provide recommendations to have more effective financial systems, the mechanism of the financial system should be understood appropriately. Hence, in this chapter, firstly, general information about the financial system is given. After that, different fund demanders and suppliers are explained. In the final part, financial instruments are identified.
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