(1)      Finance

 

Finance[1] can be considered to involve the holding of money or monetary value or with the provision of new funding or credit for business purposes or for personal use and consumption. This may be made available either in the form of money, which principally consists of bank notes or coinage, or a money substitute, such as a cheque, bill of exchange and electronic funds or funds transfer.[2] To finance would then involve the transfer of money or monetary value including the provision of credit.[3] Finance can either then consist of the holding or use of existing financial resources or with the provision of new monetary value or credit.

 

In terms of economics and economic theory, finance is a sub-field of economics that examines capital market operations and the supply and pricing of capital assets. In terms of methodology, finance assigns values (prices)[4] to financial contracts and instruments inter alia through the use of close substitutes.[5] Neo-classical finance is based on efficient market theory, risk return relations and substitution and arbitrage.[6]

 

(2)      Public Finance

 

Separate areas of finance can be identified including public finance, corporate finance and personal finance.[7] Public finance is concerned with government and public sector entity expenditure, taxation and other revenue sources and budgeting. This may also be referred to as country, state, county, city or municipality finance. Public finance is how the raised from the receipts on the use and disposal of public assets or through corporate and personal taxation.

 

(3)      Corporate Finance

 

Corporate finance is concerned with the source and application of funds for corporate activities, expansion and restructuring. This includes short-term working capital and longer-term investment capital or finance. This is based on managerial or corporate governance and decision-taking rather than with the reporting of historical and financial data which is deal with under accounting. Auditing involves the separate and independent external verification and confirmation of the validity and accuracy of internal accounts and systems.

 

(4)      Personal Finance

 

Personal finance is concerned with the provision and management of individual money and wealth, credit and debt. This includes the receipt and use of income from employment or independent trading or possibly welfare provision in other cases. Banks and other financial institutions provide a range of specific retail services for individuals and households, including current or checking and deposit or savings accounts, mortgage facilities, investment programmes, insurance services and portfolio management for wealthy clients. Personal finance planning can also more specifically include re-mortgaging, school and university fee plans and medical insurance, pension and retirement provision.

 

(5)     Finance Law

 

Finance law is the law of financial rights or financial assets which include money, financial instruments[8] and financial claims.[9] Financial claims include but are wider than monetary obligations which are obligations to pay a fixed, certain and liquidated sum of money.[10] Finance law is the law of money and the law of credit. It is the law of payment which includes the law of negotiable instruments and more modern forms of electronic funds transfer.[11] Finance law also includes the law of corporate finance and fundraising through bonds and securities issuances as well as acquisition finance. It also includes insurance law and the enforcement of general accident (contingent) insurance policies and life (non-contingent) assurance policies. These all provide for the creation of private rights of action and remedies.

 

[1]     Finance is derived from the French finance and means to furnish with finances or money or to find capital for and the French finir which is to end, to settle a dispute or a debt, to pay ransom, to bargain for or to furnish or procure.  It also includes conducting or engaging in financial operations or to manage monetary affairs. It can separately be understood to mean to put to ransom or pay ransom. J A Simpson and E S C Weiner (eds), The Oxford English Dictionary (Clarendon Press Oxford 2 ed 1989) Vol.V 921.  Dr Johnson refers to revenue, income and profit. Samuel Johnson, A History of Language and an English Grammar (W Strachan London 1967) vol.1 9e. It also means to collect, lend or spend money or to pay ransom money for release from captivity. Sir William A Craigie, A Dictionary of the Older Scottish Tongue (University of Chicago Press Chicago and Oxford University Press London) Vol.II 471.

[2]         Money substitutes principally consist of financial instruments which do not constitute money directly, but provide for the transfer of monetary value. On Money, see Section 4(1) and on Financial Instruments, Section 4 (4). A distinction can be drawn between money substitutes and money equivalents with money equivalents the alternative forms of money such as bank deposits, rather than separate payment instruments. Mises included any enforceable obligation to make payment within money substitute although this is possibly too general and non-specific. See Ludwig von Mises, ‘Indirect Exchange’ (‘The Money-Substitutes’) in Bettina E Greaves (ed), Human Action (Irvington Foundation for Economic Education 4th ed 1996), Chapter XVII, 11. The term [2]money substitute can also be used more generally to refer to any goods or assets accepted in discharge of a payment obligation. This would nevertheless legally constitute barter with the term money substitute being used more narrowly in this text to refer to an asset involves the transfer of monetary value. On Assets, see Section 3(3).    

[3]           Credit refers to the provision of usable monetary value in any other way such as through a bank account transfer or creation of a new loan or credit card account. On Credit, see Section 4(3).

[4]          (n ) and Section 7

[5]           Finance can be considered to be a relatively new area of economic study. Finance is characterised by its specific theory and methodology. This can be considered to be based on a number of underlying intuitions or assumptions which have more recently tested and expanded through the inclusion of asymmetric information and other dynamic elements. Political analysis can also be used to examine or develop the theoretic predictions produced. Stephen A Ross, ‘Finance’ Peter Newman, Murray Milgate and John Eatwell (eds) The New Palgrave Dictionary of Money & Finance (Macmillan Reference New York 1992 reprinted 1997) 26-39.

[6]           Finance can also be understood in terms of [ ] Walker, ‘Corporate Finance’ ( )

[7]           Chapter 3, Section 7.

          An instrument is a properly drafted and executed [8]legal document. Oxford. On financial instruments, see Section 3 (4) and Chapter 3, Section.

[9]           Section 2.

[10]          See Section 3(1) further below.

[11]          (n 16).