financial, fiscal and monetary

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financial

relating to finance, which is the commercial activity of providing funds and capital, or to put it the other way, the ways in which individuals and organizations raise money.

fiscal

relating to financial matters, especially government tax revenues and government expenditure and debt

monetary

relating to the money supply: the amount of money in circulation, its rate of growth, and interest rates

7 thoughts on “financial, fiscal and monetary”

  1. Hi Abhishek.
    The differences become clear if we consider fiscal, monetary and financial policy.
    Fiscal policy refers to the government’s policies on taxation, spending and borrowing.
    Monetary policy controls the money supply through changes to interest rates, bank reserve requirements and so on. This is the responsibility of the central bank rather than government in many countries.
    Financial policy attempts to maintain a stable financial system – through supervision and regulation of the banks, for example, and in times of crisis through measures such as government lending guarantees and government capital injections.

    So, strictly speaking, a ‘financial crisis’ is a crisis in the financial markets, whereas a ‘fiscal crisis’ is a government budget deficit.

    As far as business is concerned, financial is a very general word, whereas fiscal refers only to taxation. So a financial report would be about a company’s financial situation, whereas a fiscal report would be about taxes paid or due. (In practice, of course they may contain quite similar information but for different purposes.)

    I hope that helps.

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