Finance can be broken into three sub-categories: public finance, corporate finance and personal finance.
Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g.
Financial management overlaps with the financial function of the accounting profession.
However, financial accounting is the reporting of historical financial information, while financial management is concerned with the allocation of capital resources to increase a firm's value to the shareholders and increase their rate of return on the investments.
A bank accepts deposits from lenders, on which it pays interest. Banks allow borrowers and lenders, of different sizes, to coordinate their activity.An entity whose income exceeds its expenditure can lend or invest the excess income to help that excess income produce more income in the future.Though on the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income.Similar to general risk management, financial risk management requires identifying its sources, measuring it (see: Risk measure#Examples), and formulating plans to address these, and can be qualitative and quantitative.In the banking sector worldwide, the Basel Accords are generally adopted by internationally active banks for tracking, reporting and exposing operational, credit and market risks.