Financial institutions

In other terms, financial institutions are primarily engaged in channeling funds from economic agents who have savings to those who need financing.

In the euro area, banks are the main financial institution. Their business consists of receiving deposits or other reimbursable funds from the public and investing those funds at their own risk, for example, by granting credit or by purchasing debt securities issued by other entities. However, banks are not the only financial institution.

Which entities are classified as financial institutions?

The economic sector comprising financial institutions can be divided into nine subsectors, depending on the business they carry out, the risks they take, and the type and liquidity of their liabilities.

Financial institutions are classified in sector S.12 of the economic sectorisation, according to the European System of Accounts 2010.

Sectorisation table (European System of Accounts 2010).