The functions of financial markets include convergence, distribution, adjustment and reflection. Among them, the function of the financial market is that the financial market has the ability to gather many scattered small funds and become funds that can be put into social reproduction. Financial market plays the role of "reservoir" of funds; The allocation function is that the financial market transfers resources from inefficient departments to efficient departments, so that a society's economic resources can be most effectively allocated to the most efficient or effective uses, and the rational allocation and effective utilization of scarce resources can be realized; Adjustment function refers to the adjustment function of financial market to macro-economy; Reflective function means that the change of financial market can reflect the development trend of economy.

The financial market is a market where both the fund supplier and the fund demander trade through credit instruments, and it is also a market where monetary lending and financing are realized and various bills and securities trading activities are handled.

I. Financial Market "Financial market" refers to the market formed by the lending of monetary funds, the issuance and trading of financial instruments and the exchange of foreign exchange funds. It is a place where both the supply and demand sides of funds use various financial instruments to adjust the surplus and deficiency of funds through various financial transactions.

According to the financing period, it can be divided into short-term financial market and long-term financial market, and according to the transaction object, it can be divided into local currency market (including money market and capital market), foreign exchange market, gold market and securities market.

Second, the significance

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 a direct financing activity between the supply and demand sides of funds, that is, the demand side directly raises funds from institutions and individuals with surplus funds in society through the financial market. Accordingly, indirect financing refers to financing activities through banks.