Question

distinguish between financialisation in the economy and and the financial services sector.

Answer 1

Financial services sector is that sector of an economy which provide the financial or economic services. This sector includes  a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises. A financial service is best described as the process by which a consumer or business acquires a financial good.

Financialization refers to the increase in size and importance of a country’s financial sector relative to its overall economy. As mentioned above financial sector comprises of many businesses whose main aim is to provide financial services in the economy, which is very important for the growth and development of the economy. And hence the government of the economy through financialization ensures that the finance sector of the economy is working well and is it in accordance with the financial need if the economy. If the businesses are not working efficiently, government brings different reforms to improve the financial sector.Financialization has led to greater investments in technology and product development, by maintaining adequate level of finance in the economy.

So from the above discussions we can conclude that the main difference between the financial services sector and financialization is that the sector comprising of the financial institutions is called financial services sector and the process of development and maintenance of this sector is called financialization.