Factors Affecting the Level and Nature of Financial Saving

Abstract

In this chapter we are primarily concerned with the financial contribution each economic sector makes to the flow of funds to financial institutions, and which these financial intermediaries can in turn use for the speculative purchase of shares, bonds or stocks or for onward lending. One of the most relevant forms of ‘saving’, which is crucial for economic growth, is the amount of transferable funds which are the source of the financial institutions’ ability to onward lend. It is therefore appropriate briefly to illustrate the way in which the gross flow of funds from households, companies, government and from abroad are transformed through the financial system in to loans to final users.