Financial Market

Financial Market is defined as a market mechanism that allows people to buy and sell financial securities (stocks and bonds), currencies and foreign exchanges or other exchangeable items of value at low transaction costs and at prices reflecting an efficient market system. Financial markets like any other general or specialized market places interested sellers in one place thus making their task easier to find for prospective buyers. Financial markets could signify trading in financial products or the raising of capital. The relevant financial market in both the cases would be the Stock Exchange which facilitates trade in stocks, bonds and warrants. Financial markets can also mean money markets which provide for short term debts and investments as well as derivatives markets providing instruments for the management of financial risk. Futures Markets facilitating standardized forward contracts and insurance markets also come under the realm of financial markets. Financial markets is used interchangeably with capital markets which may be primary or secondary in nature depending on transactions in newly issued or existing securities. In financial market parlance, World Financial Markets or Global Financial Markets is of key importance as it is a compendium of resources for financial markets worldwide including those of the developed and the developing countries. in this context, it can be added that, development of the financial markets into a smooth and efficient body is one of the basic features concomitant with the overall development of a nation.