the Financial System and the economy

the massive changes in Eastern Europe and the former Soviet Union in the late 1980s and early 1990s startled even the geopolitical experts. The sudden collapse of a system in which the government made the basic decisions about saving, investment, production, wages, and prices left a vacuum in those economies. For example, how would individuals invest their savings? How would consumers borrow to buy new cars and homes? Who would decide which business enterprises should be funded and for how much?
Those Eastern European countries are engaged in a struggle to create a financial system, which is a network of markets and institutions to bring savers and borrowers together. In the U.S. economy and those of many other industrialized countries,the financial system already brings savers and borrowers together.At some time in your life,you will want to save some of your income for future purchases:to buy a car,finance your retirement,or pay for your children,s education. At other times,you may want to spend more than you currently have on hand:To do so you must borrow.