--%>

What can a financial institution do for a surplus

What can a financial institution frequently do for a surplus economic unit which it would have complexity doing for itself if the surplus economic unit (SEU) were to deal directly along with a deficit economic unit (DEU)?
Usually, Surplus economic units do not contain the expertise to find out whether deficit economic units can and will make good on their obligations, so it is hard for them to predict while a would-be deficit economic unit will not pass to pay what it owes. Such type of failure is likely to be devastating to a surplus economic unit which has lent a proportionately large amount of money.  on the contrary, a financial institution is in a better situation to predict who will pay and who won't. It is also at a better position, having greater financial resources, to sporadically absorb a loss while someone fails to pay. (It is just one example of the beneficial things financial institutions do for SEUs)

   Related Questions in Finance Basics

  • Q : Describe Section 28.50 Section 28.50 :

    Section 28.50: It is a Control Section of the Budget Act which authorizes the Department of Finance to increase or reduce the reimbursement line of an appropriation schedule for the reimbursements received from agencies of other state. It too contains

  • Q : What are Exempts Exempts : The state

    Exempts: The state employees exempt from civil service pursuant to the subdivision (e), (f), or (g) of Section 4 of Article VII of the California Constitution. Illustrations comprise department directors and some other gubernatorial appointees.

  • Q : Near monies Normal 0 false false false

    Normal 0 false false

  • Q : What is Availability Period

    Availability Period: The time period throughout which an appropriation might be encumbered (that is, committed for expenditure), generally specified by the law making the appropriation. When no particular time is given in financial legislation, the pe

  • Q : Equilibrium level of aggregate

    Normal 0 false false

  • Q : Explain Expenditures by Category

    Expenditures by Category: A budget display, for each and every department, which reflects actual precedent year, estimated present year, and proposed budget year expenses presented by the character of expenditure (example, State Operations and/or Loca

  • Q : Supply and demand 1. Albert Jones went

    1. Albert Jones went to his local department store to purchase a pair of Levi s. He thought that the style of Levi that he wanted would sell for about $30 a pair. When he got to the store, he saw a sign which said, Levi s, all styles, $18 a pair. Albert bought three pairs of Levi s. The behavior of

  • Q : Laffer Curveand its association to

    Normal 0 false false

  • Q : Define Expenditure Expenditure : The

    Expenditure: The expenditures reported on a department’s annual financial reports and “past year” budget documents comprises of amounts paid and accruals (comprising encumbrances and payables) for obligations made for the fiscal year

  • Q : What is Non-governmental Cost Funds

    Nongovernmental Cost Funds: For lawful basis purposes, employed to budget and account for revenues other than common and special taxes, licenses, and fees or some other state revenues.