Comparison of Economy Organizations Essay Example | Topics and Well Written Essays - 1250 words - 1

Comparison of Economy Organizations - Essay Example While credit unions are regulated by cooperatives regulations, insurance companies are regulated by incorporated entities regulations. By seeking financial assistance from a credit union, individual entities become owners of the financial institution which is not the case with insurance companies which are not owned through seeking insurance cover or any other financial assistance. Interest rates at credit unions are very attractive since they aim at initiating development among members. On the other hand, insurance companies charge high interests since they are profit oriented. Both institutions are established to offer financial security in a certain way to their clients. In a similar end result, both the credit unions and insurance companies offer a clear savings channel that is not as clear in many other financial institutions. The operation of both of these financial institutions seems to be providing a secure means to invest since the risks involved are considerably shielded from several risk types. In contrast, on one hand, credit unions ought to spur development among the members through the offering of cheap financial services. On the other hand, financial services offered by insurance companies are geared towards maximization of profits through the delivery of a range of policies and other financial services. Management is vested in the hands of a board of directors in all of the above mentioned financial institutions, with the sole responsibility of protecting the shareholders. In distinguishing open-end mutual funds from the rest, it is clear that the fund operates on a self-liquidating manner, in that it is always willing and able to purchase and sell investors’ shares any day of operation. On the contrary, closed-end mutual funds are not bound by the provision of liquidity, a factor attributed to having caused a serious performance slump at the helm of Crush of 1929 (Haslem 2009, p19).