financial market
Mbth: Financial markets.
Functions: financing, supervision and hedging.
Category: Economy
Meaning:
Financial market, also known as capital market, including money market and capital market, is a financial intermediary market. The so-called financial intermediary refers to the activities of both the supply and demand sides of funds to adjust the surplus of funds in the process of economic operation, which is the floorboard of all financial transaction activities. All kinds of financial instruments, such as stocks, bonds and certificates of deposit, are traded in the financial market. Financing is referred to as financing, which is generally divided into direct financing and indirect financing. Direct financing is the activity of direct financing between the supply and demand sides of funds, that is, the demanders of funds directly raise funds from institutions and individuals with surplus funds in society through the financial market; Correspondingly, indirect financing refers to the financing activities carried out by banks, that is, the demanders apply for loans from banks and other financial intermediaries to raise funds. Financial market has a direct and profound impact on all aspects of economic activities. Personal wealth, business operation and economic operation efficiency are directly determined by the activities of financial markets.
The composition of financial market is very complicated, and it is a huge system composed of many different markets. But generally speaking, according to the maturity of financial market trading tools, financial markets are divided into two categories: money market and capital market. The money market is a market for short-term (within one year) funds, and the capital market is a market for long-term (over one year) funds. Money market and capital market can be further divided into several different sub-markets. The money market includes interbank lending market, repurchase agreement market, commercial paper market, bank acceptance bill market, treasury bill market market, large denomination negotiable certificate of deposit market, etc. Capital market includes medium and long-term credit market and securities market. The medium and long-term credit market is a loan market between financial institutions and industrial and commercial enterprises; The securities market is a market for financing through the issuance and trading of securities, including bond market, stock market, fund market, insurance market and financial leasing market.
Compared with other markets, the financial market has its unique characteristics: First, the financial market is a market with funds as the transaction object. Second, financial market transactions are not simple buying and selling relationships, but more importantly, lending relationships, which embody the principle of separation of ownership and use rights of funds. Third, the financial market can be either a tangible market or an intangible market.