In an attempt to carry out a comprehensive study of the financial system in Nigeria, it is highly necessary to explain the meaning and qualities of a system. This will in no small measure support our understanding of the dynamic nature of the financial system. According to Nzotta (1999), a system can be defined as an organized group of components (subsystems) linked together according to a plan, to achieve specific objects. Another point of view posits that a system is a set or assemblage of things connected or interdependent with one another so as to form a complex unity. It could also be said to be a whole composed of parts in orderly arrangement according to some scheme or plan. A system can further be defined as an assemblage of objects arranged in regular subordination, or after some distinct method, usually logical or scientific; a complete whole of objects related by some common law, principle, or end; a complete exhibition of essential principles or facts, arranged in a rational dependence or connection; a regular union of principles or parts forming one entire thing; as, a system of philosophy; a system of government; a system of divinity; a system of botany or chemistry; a military system; the solar system. From the foregoing, a system has basic components which are in a functional relationship with each other and these have specific objectives. These components may be simple or complex units and are usually self-regulatory and self- adjusting. Thus, from this conceptual framework, we may surmise that systems could range from complex types like the educational system, the economic system, the financial system, etc. to smaller system like banking system, the production system etc.