Written By Hanny Melissa on Tuesday, March 21, 2017 | Tuesday, March 21, 2017

Economic turmoil has been widely discussed in various assessment forums, and discussions. The economy is strongly influenced by various variables that can bind each other.

Nevertheless at least we can combine the factors that trigger this economic upheaval into two main components of the system is run, and humans as the culprit.

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Running system:
  • The economic system will run very well, if run on the condition or the right economic climate. Because the economic system can not possibly cover the complex problems experienced by various countries, of course will be different from each other.
Man as the culprit:
  • Man as the culprit is the human control over the system being run. Because, whatever form of an economic system can not be run automatically like the application of computer systems and mechanics. Therefore the economic system must be run and controlled according to the reality faced.
A very urgent system in the economy is a system called the financial system. The term began to be discussed by the perpetrators of the economy when it was at the end of the XIX century. After that many countries realize, how important a financial system in advancing their respective economies.

In an overwhelming financial system is a system that can support the economy by focusing on the smooth flow of funds both from the excess funds and to the lack of funds. The system requires an agency that mediates between two parties to facilitate transactions and accelerate the flow of funds in question, this is a financial institution consisting of financial institutions Banks and Non-Banks and financial markets.

The financial system in terms of principles is defined as a collection of markets, institutions, regulations and techniques in which securities are traded, interest rates are determined, financial services are generated and offered worldwide.

The financial system is a network of various related elements consisting of Household, Government Institutions, Financial Institutions by forming financial markets.

The financial system in a country consists of financial institution units such as banking institutions, non-bank financial institutions and complex interacting markets with the objective of mobilizing funds for investment and providing payment system facilities for financing of commercial activities.

In the financial system intermediation occurs between those who have the funds and who need funds, transformation and risk management and market price discovery.

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Then in the end the purpose of the design of a good financial system that is to cultivate the economy of society, and more broadly is the economy of a State.

The financial system is viewed from the perspective of the development of exchange, the process of economic development occurs through three stages:

1. Barter economy.
  • At the stage of the Barter Economy, the exchange is made between goods and goods
2. Money Economy.
  • At the stage of the Money Economy, the exchange is done by using money instruments.
3. Credit Economy.
  • At the stage of Credit Economy, the exchange is made using credit payment instruments (Credit Instruments), such as credit cards, checks, and so forth.
According to the above phrase, it is explained that a financial system is a series of fund flows system from communities that have excess funds to people who are short of funds, either directly or indirectly through financial intermediaries or financial institutions.

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