What Is Financial Market
It is impossible to imagine our life without financial relations nowadays. Every day, when you go to a supermarket, pay bills for water and electricity, pay for your gasoline, take a loan in bank, sign a financial agreement or even simply pay for your cable-TV for the previous month, you act like a participant of such relations. But in a modern world, unlike the times of ancient trade-states, these relations are more specific, structured and based on a system. What are the categories "financial system" and "financial market"? Let's realize key features.
At the financial market correlation is formed between economies and investments: bringing investment in economy means the necessity to offer an income – minimum that compensates the losses from inflation. Why to invest? For the normal economic functioning mobilization and allocation of financial resources between its spheres and sectors are permanently wanted. This task can be done by the state budget (by resources' mobilization through taxation and then using the financial facilities according to the government's strategy) as well as by the instruments and possibilities of financial market (here facilities are given on a voluntary basis; and cash-flows react situation on the market).
Thus, a financial market is a complex economic system which is a sphere of relations concerning distribution of the cost and its realization by changing money on financial assets. "Financial assets" mean the debt-bills and investment values. Investment values are the instruments which form financial resources (currency values, precious metals, real estate etc.). Demand (as a buyer of financial assets) and supply co-operate at the financial market (as a seller of these assets). Each of them protects the interests which can coincide or not coincide. The coincidence of interests there is the act of purchase-sale, giving, transferring of financial assets. It means realization of cost and consumer cost, based on these assets. Money, deposits, obligation and debts (even those, which are only planned during budget's signing), precious metals and jewels, objects of the real estate, belong to them.