问答题 The basic function of financial system is to channel funds from savers who have excess of funds to spenders who have a shortage of funds．Financial system can do this either through direct finance．In which borrowers borrow funds directly from lenders by selling them securities，or through indirect finance, which involves a financial intermediary that stands between the lender－savers and the borrower．spenderS and helps transfer funds from one to the other．This channeling of funds improves the economic weltare of everyone in the society，because it allows funds to move from people who have o productive Investment opportunities to those who have such opportunities，thereby contributing to increased efficiency in the economy．In addition，channeling of funds directly benefits consumers by allowing them to make purchases when they need them most． Financial markets can be classified as debt and equity markets，primary and secondary markets．excnanges and over the counter markets，and capital markets．Financial intermediaries are financial institutions that acquire funds by issuing liabilities and in turn use those funds to acquire assets by purchasing securities or making loans．Financial intermediaries play an important role in the financial system，because theY reduce transaction costs，allow risk sharing，and solve problems created bv adverse selection and moral hazard．As a result，financial intermediaries allow small savers and borrowers to benefit from the existence of financial markets，thereby increasing the efficiency of the economy．