ABSTRACT
This chapter offers a brief insight into the basics of finance. It begins with a discussion of the history of finance – moving from the barter system towards the use of money. The chapter then shifts towards a consideration of the basic institutional framework of the financial system, emphasising the importance of commercial and investment banking. Investment banking developed as a way to satisfy the long-term funding needs of governments and corporations that could not otherwise be met through commercial banking services. As with commercial banking, investment banking includes an intermediation function: in this case, intermediation between issuers of, and investors in, securities (either debt instruments such as bonds or equity instruments such as shares). The chapter concludes with an analysis of the modern financial system, in particular, the impact of neoliberal economic theory on finance and the significant technological and financial innovations of the FinTech era that are radically altering the way that we engage with finance.
