Financial institution - wikipedia Financial institution Financial institutions are corporations which provide services as intermediaries of financial markets. Broadly speaking, there are three major types of financial institutions : Depository institutions -- deposit - taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies ; Contractual institutions -- insurance companies and pension funds Investment institutions -- investment banks, underwriters, brokerage firms. Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of this might be fewer banks serving specific target groups, and small - scale producers may be under - served. Contents 1 Standard settlement instructions 2 Regulation 3 See also 4 References Standard Settlement Instructions Standard Settlement Instructions ( SSIs ) are the agreements between two financial institutions which fix the receiving agents of each counterparty in ordinary trades of some type. These agreements allow traders to make faster trades since the time used to settle the receiving agents is conserved. Limiting the trader to an SSI also lowers the likelihood of a fraud. SSIs are used by financial institutions to facilitate fast and accurate cross-border payments. Regulation Financial institutions in most countries operate in a heavily regulated environment because they are critical parts of countries ' economies, due to economies ' dependence on them to grow the money supply via fractional reserve lending. Regulatory structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability. Some countries have one consolidated agency that regulates all financial institutions while others have separate agencies for different types of institutions such as banks, insurance companies and brokers. Countries that have separate agencies include the United States, where the key governing bodies are the Federal Financial Institutions Examination Council ( FFIEC ), Office of the Comptroller of the Currency - National Banks, Federal Deposit Insurance Corporation ( FDIC ) State `` non-member '' banks, National Credit Union Administration ( NCUA ) - Credit Unions, Federal Reserve ( Fed ) - `` member '' Banks, Office of Thrift Supervision - National Savings & Loan Association, State governments each often regulate and charter financial institutions. Countries that have one consolidated financial regulator include : Norway with the Financial Supervisory Authority of Norway, Germany with Federal Financial Supervisory Authority and Russia with Central Bank of Russia. See also Bank Consumer Credit Act 1974 ( UK law ) Credit union Financial economics Fractional - reserve banking International financial institutions List of financial regulatory authorities by country Non-bank financial institution Savings and loan association Society for Worldwide Interbank Financial Telecommunication References Jump up ^ Siklos, Pierre ( 2001 ). Money, Banking, and Financial Institutions : Canada in the Global Environment. Toronto : McGraw - Hill Ryerson. p. 40. ISBN 0 - 07 - 087158 - 2. Jump up ^ Robert E. Wright and Vincenzo Quadrini. Money and Banking : Chapter 2 Section 5 : Financial Intermediaries. ( 1 ) Accessed July 24, 2012 Jump up ^ Jayati Gosh ( January 2013 ). `` Too much of the same ''. D + C Development and Cooperation / dandc.eu. NDL : 00565888 Retrieved from `` https://en.wikipedia.org/w/index.php?title=Financial_institution&oldid=830411405 '' Categories : Financial services Hidden categories : Pages using div col without cols and colwidth parameters Talk Contents About Wikipedia Български Català Čeština Dansk Español Esperanto فارسی Français Galego 한국어 हिन्दी Bahasa Indonesia Italiano Lietuvių Nederlands 日本 語 Norsk ਪੰਜਾਬੀ Polski Português Русский Svenska Tiếng Việt 粵語 中文 17 more Edit links This page was last edited on 14 March 2018, at 17 : 31. Text is available under the Creative Commons Attribution - ShareAlike License ; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Wikipedia ® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. About Wikipedia

Question: what are two main types of financial institutions
Answer: Depository institutions