Financial Market In Economics
In economics, a monetary market is a system that allows people to commit easily the exchange through trade of financial securities (e.g.: stocks, bonds), commodities (e.g.: gold, silver, copper, agricultural goods), and other items of value. This helps to perform low transaction costs and at prices that reflect the efficiency of the market.
Financial markets exist for several hundred years and are changing nowadays with the help of technical and instrumental innovations which optimize liquidity.
Both kinds of markets (general with huge variety of commodities traded as well as specialized with only one kind of commodities traded) exist well because they commit agreement between buyers and sellers in one "place" at the same time. This way a new type of interaction is kept between buyers and sellers.
In finance, financial markets include the market of capital's raising, market's risk-transfer and the level of international financial trade. Thus, it is the meaning of financial market as for those who are interested in the capital and want it.
The traditional borrower is interested in receiving a lender, giving a signed promise to pay back capital and percents. The main guarantee in this case is the financial securities which can be freely sold or bought on the market. The compensation for lending money is formed as dividends or percent for the payment.
Without system of the financial market, it would be difficult for the borrowers to find lenders without any kind of regulating system. Intermediaries (banks and brokerage companies) help to organize the market, taking deposits from those who have money, and giving loans to those who are interested in free financial resources. Loans and mortgages give the flow of financial power for the participants of the market.