Finance discussion board response. 200 words.

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Initial Response:

Briefly discuss the purpose and role that each type of financial institutions (depositary, contractual, and investment) play in the U.S. economy. How do each of these institutions intersect with the various types of markets, i.e., capital, money, spot (cash), derivatives, Forex and Interbank, primary, and secondary (inclusive of OTC)?

Reply to this post:

Depositary: “Bank, building society, credit union, or other financial institution that solicits and accepts savings of the general public as demand deposits or time deposits, and pays a fixed or variable rate of interest.” (Business Dictionary, 2018) Depository institutions are made up of commercial banks, savings and loan associations, credit unions, and mutual savings banks.

Contractual: “Contractual savings institutions include national provident funds, life insurance companies, private pension funds, and funded social pension insurance systems.” (The World Bank, 2018) Contractual institutions are insurance companies and pension funds. These organizations mainly invest their resources into longer-term securities like stocks and bonds, and mortgages.

Investment: “An investment company is a corporation or a trust through which individuals invest in diversified, professionally managed portfolios of securities by pooling their funds with those of other investors.” (Investopedia, 2017) Investment institutions could be banks, underwriters, or brokerage firms. These institutions are middlemen who invest in financial assets for both institutions and individuals.

Each of these institutions intersect with the various types of markets (capital, money, spot, derivatives, forex, primary, and secondary) as a mode of raising capital, using capital as with risk/reward ratio, and using long term time horizon investing methods. All of these institutions base their returns off of the position made in the investment.


Business Dictionary. (2018). What is depository institution? definition and meaning. Retrieved from

Investopedia. (2017, October 10). Types Of Financial Institutions And Their Roles. Retrieved from

McMillan, B. (2017, June 27). The Importance Of Time Horizons For Investing (And Beyond). Retrieved from

The World Bank. (2018). Overview of contractual savings institutions (English) | The World Bank. Retrieved from

Respond to the bold post. Use APA, No title page needed. at least one reference is needed.

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