a. Nonfinancial corporations
4.62 Nonfinancial corporations are corporations whose principal activity is the production of market goods or nonfinancial services. These include legally constituted corporations, branches of nonresident enterprises, quasi-corporations, notional resident units owning land, and resident nonprofit institutions that are market producers of goods or nonfinancial services.
b. Financial corporations
4.63 Financial corporations consist of all corporations and quasi-corporations that are principally engaged in providing financial services, including insurance and pension fund services, to other institutional units. The production of financial services is the result of financial intermediation, financial risk management, liquidity transformation, or auxiliary financial services. In other manuals, financial corporations are sometimes called financial institutions.
4.64 Financial corporations can be divided into three broad classes, namely, financial intermediaries, financial auxiliaries, and other financial corporations:
(a) Financial intermediaries consist of deposit taking corporations, investment funds, other financial intermediaries, insurance corporations, and pension funds. Financial intermediation is a productive activity in which an institutional unit incurs liabilities on its own account for the purpose of acquiring financial assets by engaging in financial transactions on the market. Financial intermediaries as institutional units collect funds from lenders and transform or repackage them (with respect to maturity, scale, risk, and the like) in ways that suit the requirements of borrowers. Through financial intermediation, funds are channeled between parties with a surplus on one side and those with a need for funds on the other. A financial intermediary does not simply act as an agent for these other institutional units but places itself at risk by acquiring financial assets and incurring liabilities on its own account.
(b) Financial auxiliaries are institutional units principally engaged in serving financial markets, but they do not take ownership of the financial assets and liabilities they handle or regulate.
(c) Other financial corporations are institutional units providing financial services, where most of their assets or liabilities are not available on open financial markets. These corporations are included in the captive financial institutions and money lenders subsector.
Paragraph 4.62 - 4.64, Page 60-61, BPM6
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