financial mechanism

A financial mechanism refers to the systems and processes that facilitate the flow of money within an economy or between entities. This includes tools like banks, investment funds, and markets that allow individuals and businesses to borrow, lend, invest, and trade financial assets. These mechanisms enable capital allocation, risk management, and economic growth by connecting surplus funds (savers) with those in need of funds (borrowers). Essentially, they help ensure that money is used efficiently and effectively to support various economic activities.