∞MONEY FLOWSign in

ECONOMIC SYSTEM / THE CONNECTIONS BEHIND THE FLOWS

From production to settlement.
Follow claims, risk and safeguards.

Extend the System Map and Banking System with the infrastructure and accounting that connect the real economy to finance. Explore four drawings, select a box or arrow, and follow six hypothetical transaction chains.

HYPOTHETICAL WORKED MODEL

Read this view: Economic system

Connect production, settlement, nonbank risk and financial safeguards.

What the picture means

Cash transfers, messages, claims, risk and real goods have different line styles and meanings. A reporting record is not a payment.

Try this

Choose one of four views, focus a component, and follow the numbered relationships and worked cases.

01 / FOUR CONNECTED VIEWS

Production, income & public services

Arrowheads show the direction of the labeled relationship. Solid lines are cash or real inputs; dashed lines are claims, messages, risk or oversight. Equal widths are schematic. Boxes group roles; example organizations are not identified counterparties of a measured transaction. On a phone, scroll within the drawing or use the selectors and connection list.

Economic system

Text list of connections
02 / WORKED TRANSACTION CHAINS

See what changes—and what does not

All amounts are hypothetical teaching cases. Jurisdictions, contracts and accounting rules can change the exact mechanics.

01 / VALUE ADDED

A $100 product is not $200 of GDP

  1. A supplier sells newly produced inputs for $30 and uses no purchased inputs in this example: value added $30.
  2. A producer buys those inputs and sells its output for $70: value added $70 − $30 = $40.
  3. A retailer buys the output for $70 and sells it to a household for $100: value added $100 − $70 = $30.

GDP from these stages is $30 + $40 + $30 = $100, matching final consumption. Gross sales are $30 + $70 + $100 = $200; intermediate purchases must not be counted again. This example excludes taxes, subsidies, imports and other production.

BEA · national accounts ↗
02 / CREDIT BETWEEN FIRMS

A $1,000 invoice becomes earlier cash

  1. A supplier delivers goods on credit: receivable +$1,000; buyer payable +$1,000. No bank transfer is necessary at that moment.
  2. A factor purchases the invoice for $980 under a simplified outright sale: supplier cash +$980; factor cash −$980 and invoice claim +$1,000.
  3. The buyer later pays $1,000 to the factor. Gross spread = $1,000 − $980 = $20, before funding cost, servicing and any loss.

No extra $1,000 of GDP arises from selling the invoice. Recourse, disputes, credit losses and fees change the real contract.

IFC · receivables finance ↗
03 / CLEARING AND SETTLEMENT

$180 of gross obligations, $20 net

  1. Bank A owes Bank B $100; Bank B owes Bank A $80.
  2. In a simplified bilateral netting arrangement, net A→B = $100 − $80 = $20.
  3. RTGS instead processes eligible payments individually; timing, available liquidity and system rules matter.

Netting reduces the final bilateral amount in this example. It does not prove that only $20 of liquidity was needed at every instant, erase default risk, or make a Swift message equal to settlement.

BIS / IOSCO · infrastructures ↗
04 / REINSURANCE

Who bears a $100 covered claim?

  1. A toy quota-share treaty transfers 40% of an eligible insurance claim.
  2. The primary insurer owes the policyholder $100 and has a contractual $40 recovery from the reinsurer.
  3. After that recovery, retained claim cost = $100 − $40 = $60.

The policyholder’s contract remains with the primary insurer in this model. The example excludes premiums, commissions, limits and exclusions; it assumes the reinsurer pays. It is not a statement that claims are universally covered.

Swiss Re · risk transfer ↗
05 / SECURITIZATION

A $1,000 pool and two claims

  1. A vehicle acquires a $1,000 loan pool, financed by a simplified $800 senior claim and $200 junior claim.
  2. If a contractual principal waterfall assigns the first $100 loss to junior holders, junior value becomes $100 and senior principal remains $800.
  3. If losses total $250, junior absorbs $200 and senior absorbs $50; remaining principal totals $750.

These are stipulated toy priority rules, not a universal securitization structure or a market price. Packaging reallocates exposures; it does not remove losses.

IMF · nonbank exposures ↗
06 / LIQUIDITY AND SOLVENCY

A loan can supply cash without repairing equity

  1. A toy bank has $100 cash, $900 other assets, $920 liabilities and $80 equity.
  2. A $150 withdrawal requires $50 more immediate cash if no other liquid asset is available.
  3. A $50 collateralized liquidity loan adds $50 cash and $50 liabilities. After paying the withdrawal: assets $900, liabilities $820, equity still $80.
  4. A separate $120 asset loss makes equity $80 − $120 = −$40. Taking another equal-asset/equal-liability loan alone does not repair that equity.

Collateral, eligibility and legal conditions govern liquidity support. Resolution and recapitalization address different problems.

Federal Reserve · liquidity access ↗

Try the GDP expenditure identity

Enter values in the same hypothetical currency and period. All values except I must be nonnegative. C = final consumption; I = gross investment including inventory change (which can make I negative); G = government consumption and investment; X = exports; M = imports. Transfers and security purchases are excluded. Negative calculated GDP means these simplified inputs do not describe a coherent positive-production example.

GDP = 600 + 150 + 200 + 100 − 50 = 1,000

03 / SITE COVERAGE REVIEW

What was already present, and what is expanded here

This review compares the existing site with institutional-sector accounting, market-infrastructure standards and nonbank-finance framing. It is an editorial coverage review, not a claim that every institution or economic theory fits one diagram.

Already covered

Core sectors, banks, assets and markets

System Map and Banking System identify households, firms, government, the rest of the world, banks, funds, pensions, property and resources.

System Map →
Expanded here

Payment and post-trade infrastructure

Separate messages, trading, CCP clearing, securities depositories, final payment settlement and trade reporting.

Settlement view →
Expanded here

Insurance, nonbank credit and supply-chain finance

Separate insurance promises, reinsurance, funded pensions, fund shares, invoice claims and securitization vehicles.

Risk view →
Added explicitly

Financial safety net and operational dependencies

Supervision, deposit protection, resolution, collateralized liquidity and technology continuity have distinct jobs.

Safeguards view →
Worked examples added

Production versus financing and gross turnover

Connect value added, intermediate inputs, transfers and real investment; show what is outside GDP.

Worked examples →
Boundaries expanded

Environment, unpaid care and wellbeing

Nature, household work and distribution belong in a broader economic picture; a money-flow map alone cannot measure all wellbeing.

Measurement boundaries →
04 / BOUNDARIES OF THE PICTURE

Economic value extends beyond bank transfers

Services, public output and nonprofits

Education, health, transport and digital services contribute to output alongside goods. Government and nonprofit services can be supplied without a direct customer price. Funding receipts and the service supplied require separate accounts.

UN · institutional sectors ↗

Unpaid care, distribution and wellbeing

Much unpaid household care and domestic work is outside conventional GDP production boundaries. Income distribution, access to services and unpaid time also matter. A high volume of market transfers alone is not a wellbeing measure.

BEA · production boundaries ↗

Nature, depletion and external effects

Resource extraction and ecosystem services have physical consequences as well as market values. Pollution, depletion and changes in ecosystem condition need complementary environmental accounts. Do not add a resource stock to annual income.

UN SEEA ↗

Information, contracts and uncertainty

Credit information, audits, legal enforceability, accounting and fraud controls affect trust and access to finance. Financial-crime controls and conduct supervision operate alongside prudential rules. Diagrams group these functions; their legal implementation differs by country.

Supervisory guidance ↗
05 / COMPONENT GUIDE

Read every component without the drawing

Production, income & public services

Follow real output and the payments that fund it. Nature and unpaid household work have economic value even when no matching market payment occurs.

  • Households — Households supply labor, earn income, purchase output and hold assets. Unpaid care and much own-use household work are outside conventional GDP production measures; they still contribute to wellbeing.
  • Businesses — Nonfinancial producers combine inputs, labor and capital. Sales are not all value added: purchased intermediate goods and services must be deducted.
  • Rest of world — Foreign households, firms and governments exchange goods, services, income and financial claims with the home economy. Imports are deducted in the expenditure identity because consumption and investment can include foreign output.
  • Government & social insurance — Government supplies services, purchases output and redistributes income. A benefit or cash transfer is not itself the purchase of newly produced output. Public social insurance and funded private pensions need separate treatment.
  • Banks & finance — Finance supports inventories and investment. Borrowing is financing; receiving a loan is not the same event as producing GDP.
  • Suppliers & trade credit — Suppliers sell intermediate inputs and may allow payment later. The seller holds a receivable and buyer has a payable. Factoring can fund the invoice before the buyer pays.
  • Nonprofits & public benefit — Nonprofits serving households are a separate national-account sector. Donations fund activity; the donation itself and the services subsequently supplied are distinct events.
  • Capital goods & knowledge — Produced capital helps future production. New equipment, qualifying software and research differ from a secondary-market purchase of a share or an existing asset.
  • Nature & ecosystem services — Natural assets support production and life. Monetary transactions, physical resource use, depletion and ecosystem condition are different measurements; SEEA links them without calling all of them GDP.

Payments, trading & settlement

An order or message initiates a process. Clearing determines obligations; settlement changes the relevant cash and securities accounts. These are different functions.

  • Customers & investors — People and organizations instruct payments and securities trades through eligible institutions. Sending an instruction is not proof of final settlement.
  • Payment banks — Banks maintain customer deposits and use appropriate settlement arrangements. A customer deposit and the bank reserve used between banks are different liabilities.
  • Payment systems / RTGS — Payment systems process transfers under their rules. RTGS settles each processed payment individually; deferred-net systems have different timing and exposures.
  • Brokers & clearing members — Intermediaries access venues, clearing and settlement for themselves and clients. Client assets, firm capital and margin have distinct accounting treatment.
  • Trading venues — A venue matches or organizes trading. It is not automatically the central counterparty, depository or ultimate seller.
  • Central counterparties — A CCP interposes itself between counterparties for eligible cleared transactions. Margin and default arrangements reduce or manage exposures; they do not make risk disappear.
  • Securities depositories — CSDs record securities and support settlement. Delivery-versus-payment arrangements link securities delivery to the corresponding payment. Custody and ownership records must be distinguished from the operator owning client assets.
  • Messaging networks — Messaging connects institutions and supports reconciliation. Swift supplies secure financial messages; the cash transfers take place through the relevant accounts and payment arrangements.
  • Trade repositories — Repositories collect and maintain eligible transaction data for reporting and oversight. Reporting an exposure does not pay it, clear it or guarantee performance.

Nonbank credit, insurance & pensions

Trace claims and contractual risk alongside cash. Funds, insurers and pension institutions already appear on the site; this view makes their different funding mechanics explicit.

  • Savers & policyholders — People allocate savings, buy protection and receive retirement or insurance payments. Product protections and access to cash differ.
  • Funded pensions — Contributions support a pool of invested assets and retirement obligations. A funded pension institution is not the same mechanism as a public pay-as-you-go social-insurance scheme.
  • Insurance companies — Insurers receive premiums and promise contingent payments. Their assets support liabilities, expenses and capital; premium income is not all free distributable profit.
  • Reinsurers — Insurers transfer specified exposures for a premium. Deductibles, limits, exclusions and creditworthiness determine how much risk is actually transferred.
  • Funds & private credit — Investment pools can hold bills, securities or loans. A money market fund share is not a bank deposit. Redemption demand and leverage can create funding pressure.
  • Banks & originators — Banks originate credit and may retain it, sell it or service it after sale. The accounting and risk outcome depends on the transaction.
  • Securitization vehicles — A separate vehicle can hold a loan pool and issue asset-backed claims. Packaging a loan does not automatically erase credit risk or create new real production.
  • Borrowers & invoice sellers — Borrowers meet contractual payments from income or refinancing. Suppliers can sell eligible receivables to obtain earlier cash; recourse and fees matter.
  • Markets & counterparties — Institutions invest and exchange claims with issuers and other investors. This is a channel, not one legal entity receiving every payment.

Safeguards & stress transmission

Distinguish supervision, deposit protection, liquidity support and resolution. Solid arrows show cash legs; dashed arrows show oversight, contractual exposures or operating dependencies.

  • Banks — Withdrawal pressure needs usable settlement assets. Loan losses or valuation changes can impair equity. Liquidity and solvency are related but different.
  • Investment funds — Redemptions, leverage and margin calls can force asset sales and transmit price pressure. A loss in a fund is not automatically covered by bank deposit insurance.
  • Clearing infrastructure — CCPs depend on collateral, members and operational continuity. Default resources and recovery arrangements are product- and rule-specific.
  • Central bank liquidity — Liquidity facilities can supply cash against eligible collateral under legal conditions. A loan creates obligations and is not the same thing as restoring negative equity.
  • Supervisors & regulators — Prudential supervisors address institution safety; conduct and market authorities oversee other functions. Mandates are divided differently across jurisdictions.
  • Deposit protection — Deposit insurance protects covered deposit claims under country-specific rules. It does not insure every investment, uninsured balance or institution.
  • Resolution authorities — Resolution manages a failed institution under applicable law. Asset transfers, payouts, restructuring and loss allocation are distinct from routine liquidity provision.
  • Fiscal & legal authorities — Law defines safeguards and government controls budgets and public commitments. Any exceptional support has its own authority and cost; it is not an automatic model assumption.
  • Technology & operations — Payments and markets depend on software, communication, power and accurate records. Outages or cyber incidents can obstruct access and settlement without an initial asset loss.
06 / PRIMARY SOURCES

Definitions and institution references

Source roles reviewed October 11, 2026. Examples identify services or roles, not endorsements, current financial ratios or actual transactions between named institutions.

Full Money Flow Sources page →

VISITORS

Cumulative visitor map

Approximate city-level IP geolocation since September 14, 2026. Public markers require at least 3 visits; no IP address is shown or retained in this aggregate.

Santa Clara, US: 164 visitsSanta Clara, US164Ashburn, US: 144 visitsAshburn, US144Singapore, SG: 114 visitsSingapore, SG114Shibuya City, JP: 84 visitsShibuya City, JP84Frankfurt am Main, DE: 84 visitsFrankfurt am Main, DE84London, GB: 72 visitsLondon, GB72Hong Kong, HK: 69 visitsHong Kong, HK69Des Moines, US: 68 visitsDes Moines, US68Boydton, US: 63 visitsBoydton, US63Phoenix, US: 57 visitsPhoenix, US57Jakarta, ID: 56 visitsJakarta, ID56Brussels, BE: 55 visitsBrussels, BE55Council Bluffs, US: 55 visitsCouncil Bluffs, US55Copenhagen, DK: 54 visitsCopenhagen, DK54São Paulo, BR: 49 visitsSão Paulo, BR49Berlin, DE: 47 visitsBerlin, DE47Amsterdam, NL: 41 visitsAmsterdam, NL41Chennai, IN: 41 visitsChennai, IN41Brussels (Brussels Capital), BE: 40 visitsBrussels (Brussels Capital), BE40Osaka, JP: 39 visitsOsaka, JP39Yongsan-dong, KR: 39 visitsYongsan-dong, KR39Montreal, CA: 37 visitsMontreal, CA37Beijing, CN: 37 visitsBeijing, CN37Atlanta, US: 35 visitsAtlanta, US35Guangzhou, CN: 34 visitsGuangzhou, CN34Chengdu, CN: 32 visitsChengdu, CN32Tracy, US: 30 visitsTracy, US30Mountain View, US: 30 visitsMountain View, US30Pune, IN: 30 visitsPune, IN30Cupertino, US: 30 visitsCupertino, US30Shanghai, CN: 28 visitsShanghai, CN28Quincy, US: 28 visitsQuincy, US28Geneva, CH: 27 visitsGeneva, CH27Los Angeles, US: 27 visitsLos Angeles, US27Washington D.C., US: 24 visitsWashington D.C., US24New York, US: 22 visitsNew York, US22Ann Arbor (Old West Side), US: 21 visitsAnn Arbor (Old West Side), US21Stockholm, SE: 21 visitsStockholm, SE21Dublin, IE: 21 visitsDublin, IE21Zurich, CH: 21 visitsZurich, CH21Newport, GB: 20 visitsNewport, GB20Falkenstein, DE: 20 visitsFalkenstein, DE20Nanjing, CN: 19 visitsNanjing, CN19Warsaw, PL: 19 visitsWarsaw, PL19Campinas, BR: 18 visitsCampinas, BR18North Charleston, US: 17 visitsNorth Charleston, US17The Dalles, US: 17 visitsThe Dalles, US17Chicago, US: 16 visitsChicago, US16Leeds, GB: 15 visitsLeeds, GB15Paris, FR: 14 visitsParis, FR14Moscow, RU: 14 visitsMoscow, RU14Kuala Lumpur, MY: 14 visitsKuala Lumpur, MY14Nuremberg, DE: 12 visitsNuremberg, DE12Toronto, CA: 12 visitsToronto, CA12Gävle, SE: 11 visitsGävle, SE11Saint-Denis, FR: 10 visitsSaint-Denis, FR10Stockholm (Norrmalm), SE: 10 visitsStockholm (Norrmalm), SE10Haidian (Haidian Qu), CN: 10 visitsHaidian (Haidian Qu), CN10Groningen, NL: 10 visitsGroningen, NL10Dublin, US: 10 visitsDublin, US10Singapore (Pioneer), SG: 10 visitsSingapore (Pioneer), SG10Maidstone, GB: 10 visitsMaidstone, GB10Trenton, US: 10 visitsTrenton, US10Auckland, NZ: 10 visitsAuckland, NZ10Columbus, US: 9 visitsColumbus, US9Las Vegas, US: 9 visitsLas Vegas, US9Roubaix, FR: 9 visitsRoubaix, FR9Dubai, AE: 9 visitsDubai, AE9Hyderabad, IN: 9 visitsHyderabad, IN9Eygelshoven, NL: 8 visitsEygelshoven, NL8Stockholm (Kista), SE: 7 visitsStockholm (Kista), SE7San Antonio, US: 7 visitsSan Antonio, US7Kyiv, UA: 7 visitsKyiv, UA7Madrid, ES: 7 visitsMadrid, ES7Boardman, US: 6 visitsBoardman, US6Bangkok, TH: 6 visitsBangkok, TH6Sydney, AU: 6 visitsSydney, AU6Diadema, BR: 6 visitsDiadema, BR6Helsinki, FI: 6 visitsHelsinki, FI6North Bergen, US: 6 visitsNorth Bergen, US6Jacksonville (Deerwood), US: 5 visitsJacksonville (Deerwood), US5Melbourne, AU: 5 visitsMelbourne, AU5Montreal (Ville-Marie), CA: 5 visitsMontreal (Ville-Marie), CA5Canberra, AU: 5 visitsCanberra, AU5Richmond, US: 5 visitsRichmond, US5Portland, US: 5 visitsPortland, US5Riyadh, SA: 5 visitsRiyadh, SA5Miami, US: 5 visitsMiami, US5Beauharnois, CA: 5 visitsBeauharnois, CA5Groningen (Oosterpoortwijk), NL: 4 visitsGroningen (Oosterpoortwijk), NL4Lomé, TG: 4 visitsLomé, TG4Karachi, PK: 4 visitsKarachi, PK4Frankfurt am Main (Innenstadt I), DE: 4 visitsFrankfurt am Main (Innenstadt I), DE4Dulles, US: 4 visitsDulles, US4Vélizy-Villacoublay, FR: 4 visitsVélizy-Villacoublay, FR4Vienna (Wieden), AT: 4 visitsVienna (Wieden), AT4Zhengzhou, CN: 4 visitsZhengzhou, CN4Cota, CO: 4 visitsCota, CO4Marrakesh, MA: 4 visitsMarrakesh, MA4Santiago, CL: 4 visitsSantiago, CL4Your approximate current visitYOUR VISIT●
3,209geolocated cumulative visits125 locations meet the public privacy thresholdYour current visit was recorded near Columbus, US.
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