Financial Claims

Financial claims?

The problem facing the financial system is how to transfer the SSU's excess purchasing power to the DSU's that wish to borrow to finance current expenditure. The transfer can be accomplished by an SSU lending money to and accepting an IOU from a DSU. An IOU is a written promise to pay a specific sum of money plus a fee for the privilege of borrowing the money over a period of time. IOUs are called financial claims. They are claims against someone else's money at a future date.

-Financial markets, institutions and money 3rd edition / Wiley publishing