The column headers are: banks, the bond market, and the stock market. The first section titled, What they are, shows the following details.

Row 1. Banks: A bank borrows money from savers and lends it out in an effort to earn itself a profit. The bond market: A bond is an I O U. Specifically, a promise to pay back a loan with interest. The stock market: A stock represents partial ownership in a firm that may pay uncertain future dividends.

Row 2. Banks: Shadow banks are financial firms that are similar to banks, but are not regulated like banks. The bonds market: The bond market is where companies and governments can borrow large sums of money. The stock market: The stock market is the market where people buy and sell existing stocks.

The second section titled, What they do, shows the following details:

1. Reallocate resources from savers to borrowers.

Row 3. Bank: A saver deposits money in the bank which the banks lends to others helping fund their investments. The bond market: A saver buys bonds, funding company or government investments. The stock market: A saver buys shares in a company, funding company investment.

2. Shift resources through time.

Row 4. Banks: Money deposited today can be withdrawn in the future. Money borrowed today is repaid in the future. The bond market: Bonds bought today can be sold in the future. Bonds sold by companies or governments today must be repaid in the future. The stock market: Stocks bought today can be sold in the future. A company selling shares today gives up a share of its profits in the future.

3. Reallocate, spread, and reduce risk.

Row 5. Banks: Savings are lent out to multiple borrowers. The bond market: Bonds can be bought in multiple companies. The stock market: Stock can be bought in multiple companies.

4. Create liquidity.

Row 6. Banks: Savers can always withdraw their savings. Borrowers get long-term loans. The bond market: Bondholders can sell their bonds. The issuer repays to whoever owns the bond on maturity. The stock market: Shareholders can sell their stock. The investment remains with the company forever.

5. One big risk: They create interdependencies.

Row 7. Banks: Bank runs. The bond market: Default risk, term risk, and liquidity risk. The stock market: Financial bubbles.

6. Other functions.

Row 8. Banks: Solve information problems. Provide payment services. The bond market: Fund government debt. The stock market: Reallocate control.

What is:

Liquidity: The ability to quickly and easily convert your investments into cash, with little or no loss in value.

Speculative bubble: When the price of an asset rises above what appears to be its fundamental value.

Bank run: When many bank customers try to withdraw their savings at the same time.

Efficient market hypothesis: The theory that at any point in time, stock prices reflect all publically available information.