What is Financial Markets?
Financial Market is an institution or arrangement that facilitates the exchange of financial instruments, including deposits, and loans, corporate stocks and bonds, Government bonds and more exotic instruments such as options and futures contacts. The market, which deals with trading of financial instruments like financial claims, assets and securities is known as financial market. According to Eugene F. Brigham, Financial market is “the place where people and organisations wanting to borrow money are brought together with those having surplus funds.” There is no specific place to indicate a financial market. Wherever a financial transaction takes place, it is deemed to be a financial market.
Existence of a dynamic and a resilient financial market is the most important requisite for the development of an economy. The financial market helps the economy in many ways such as mobilisation of savings. Investment of such funds, contributes to the growth of the nation by converting the idle and scattered funds to productive purposes. It is also helpful for industrial growth, which is a must for economic development to become a welfare state.
Financial markets are the centres which provide facilities for buying and selling of financial claims and services. Financial products are traded in these markets by the corporations, financial institutions, individuals and Government, either directly or indirectly through brokers and dealers.
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