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International Financial Markets - Essay Example
Finance & Accounting
Pages 10 (2510 words)
International Financial Markets Contents Contents 2 Introduction 2 Discussion 3 Financial System Structure 3 Financial markets and their economic importance 4 Importance of Bond Market 6 Importance of Equity Market 8 Importance of Foreign Exchange Market 10 Importance of Derivatives Market 11 Conclusion 12 References 13 Introduction Financial markets are vital for any economy…
They lend such surplus fund to the borrowers like households, businesses, governments who want to finance their personal expenditures like purchase of houses, cars and furniture. This kind of flow of funds form the lenders to the borrowers follows two ways known as direct finance and indirect finance. In the former concept the borrowers have access to the finance from the lenders directly. They do this by selling their fiscal tools which represent a claim on the potential proceeds and assets of the borrower. Financial instruments are assets for individuals who buy them and are liabilities for individuals who sell them. Through this process of buying and selling of securities the flow of money is occurs in the economy which is very vital for the economy. Hence financial markets are the medium through which such transactions happen. The financial markets comprises of equity market, debt market, derivative market and foreign exchange market. Each of this market acts as the medium of flow of fund in the economy. This report will analyse the importance of the financial markets and the role which they play in the development of international trade and economic development. ...