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Questions and Answers
Which of the following best describes non-bank financial institutions?
Which of the following best describes non-bank financial institutions?
- Financial institutions that provide loans to economic units seeking funds from sources other than the public
- Financial institutions that are regulated by the BSP and engage in lending funds obtained from the public
- Financial institutions that engage in specific functions related to claims, financial information, and advice (correct)
- Financial institutions that are banks but currently subject to regulations by the BSP
What are the two groups that component institutions are sub-divided into?
What are the two groups that component institutions are sub-divided into?
- Government and private institutions
- Banks and non-banks
- Quasi-banking and lending of funds from sources other than the public (correct)
- Public and private institutions
Are component institutions considered as banks?
Are component institutions considered as banks?
- Yes, they are considered as banks
- No, they are not considered as banks (correct)
- They are considered as banks but subject to different regulations
- They are considered as banks but not subject to regulations
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Study Notes
Non-Bank Financial Institutions
- Non-bank financial institutions are financial institutions that do not accept deposits from the general public and are not licensed as banks.
- They provide various financial services to individuals and businesses, but are not classified as banks.
Component Institutions
- Component institutions are sub-divided into two groups:
- Deposit-taking institutions (e.g. credit unions, building societies)
- Non-deposit-taking institutions (e.g. insurance companies, pension funds, investment firms)
Component Institutions vs. Banks
- Component institutions are not considered as banks, as they do not accept deposits from the general public and are not licensed as banks.
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