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The U.S. financial system and its many complexities which are impacted by several environmental factors, including federal regul - Research Paper Example
Author : knikolaus
Finance & Accounting
Pages 3 (753 words)
The U.S. financial system and its many complexities College Name Teacher Name Finance Date: 2nd May 2013 Impact of U.S. Financial Markets on Economy as a Whole The well-developed financial markets which are effortlessly operating, plays vital role in the progress of health and effectiveness of the economy…
The Federal Reserve situates the monetary policy of the nation in order to encourage the stable prices, objectives of highest employment, and reasonable interest rate for long-term basis. The biggest challenge for all the policy makers, is that pressure among the set goals might take place in short run as well as the information with respect to economy is accessible only with a delay and chances are that it might be inadequate. Financial markets assist in effectively directing the flow of investments and savings within the economy which facilitates the growth of capital along with production of products and services in different ways. The ideal blend of strong institutions and financial markets as well as different range of financial instruments and products, perfectly fits with the lenders and borrowers’ need and hence the entire economy. Financial Markets and Institutions A financial market includes bonds or trade stocks, an instrument includes derivatives and bank CDs and institutions includes banks, insurance companies and funds. They all offer opportunities to investors so that they can specialize in diversify risks, specific market and/or services, or both and can exchange financial assets (Fabozzi, 2002). ...
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