Note 2-2

(2) The financial system roughly consists of indirect finance and direct finance. In "indirect finance," financial institutions take risks and are positioned between households and enterprises. These institutions collect deposits and others from households and lend them to enterprises. In "direct finance," households and other end investors take risks directly and purchase prime securities (debt certificates, stock certificates, industrial bonds, commercial paper, etc.) as issued by enterprises through the stock, bond and other securities markets.