Latin-American Studies

Financial services are the services that are offered by the organizations in the finance industry which range from banking, insurance, mortgage, vestment firms and credit card companies among others. These services play a vital role in the economy and society at large. The presence of a competitive and strong financial service sector within a country, it is an indication of a viable and productive economy for the country.  These financial institutions provide businesses with the necessary finances for start up, growth and improving efficiency and production (Joseph, 2000, p. 42). When new businesses are created and existing ones improve production, there are benefits that accrue out of these developments for the economy like, more production, greater financial wellbeing and more employment in turn improving the financial status of the society as result.

The financial services sector major roles in the society is offering a wide range of money managing services  to  their consumers for their  whole lifetime ,  some of these vitals services include insurance ,credit and loans , investment services healthcare insurance that help the society manage  theirs  health bills and even financial advice among other major services (Christopher, 2000, 111) . These services also create wider advantage to the economy as a whole by improving business for the economy.  The other major role these financial institutions play is providing an avenue for distribution of financial resources by the government to its citizenly by providing access to these financial services through their networks .this offers a platform for improving and sustaining productivity and in turn improving the societies standards of living. The intermediary services offered by the financial service sector.

Financial service institutions are essential for the proper functioning of the economy by providing access to finance and the present economies cannot function effectively without a smooth running finance sector. A well performing finance sector is critical in improving fiscal and monetary policies of a governments economy. And are also essential in reducing the social and economic costs of the economy in times of economic distress, studies have also revealed that well performing finance sector creates a more balanced access to capital even to the low and middle income earners in the society (Watkins, 1998, p. 12).

As much as the services offered by these financial institutions make possible the smooth running of the economy, most of these services involve risk taking and sometimes the process can plunge the economy and the society as a whole into crisis as is being experienced in the ongoing global financial crisis due to failures in regulation of risk taking by some of the organization in the finance sector (Christopher, 2000, p. 113). This is one of the examples of how excessive risk taking by the industry can lead to a multitude of problems for the economy and the society at large. However, risk taking is part of the finance industry and if eliminated some of the services offered by these institutions would not be available leaving regulation as the only means of circumventing excessive risk taking (Joseph, 2000, p. 44)

Another key role the financial institutions play in the economy is influencing the course of the global economy through their interconnectedness this makes shocks to experience in one place to be experienced across the globe as was witnessed with the global financial crisis. This influences the course of the whole global economy through buttressing the linked downward recession. The opposite case applies when there are improvements in economy in one region which through the interconnections influence growth in the whole global economy.