World Financial Market: Key Aspects

The global financial market is viewed as a single market for loan capital of residents of different countries. It began to be formed back in the 1960s, when deals were especially active among representatives of different countries, that is, international operations developed.

In the process of merging many companies from different countries, international organizations, companies and firms that can freely operate at the international level began to be formed. This, in turn, contributed to the convergence of domestic markets, and subsequently formed a single global financial market. This happened thanks to the legislative revenues of the government and the softening of its borders. And the development of economic relations between countries carried out in this market is associated with the continuous improvement of computer technologies and the development of new means of communication.

The world financial market and its structure.

If we consider the term "world financial market", as the circulation of financial assets at the international level, then conditionally it is divided into external and internal. Domestic financial markets are divided into two categories: the market of operations in international currency and the national one. The latter, of course, takes up most of all the country's operations, that is, transactions for the sale of any securities or other assets are made only in the currency of the country. The market in which transactions with securities in foreign currency are traded is not so large in scale of operations as the previous one, moreover, it is subject to strict control by the state.

The global financial market includes such a component as foreign markets. External to this country is the market of other countries, where the movement of financial assets is made in the currency of that state. It is conditionally divided into foreign and international or euro market. On the international market transactions are concluded in a currency that does not belong to the issuing country of the securities. However, it is not worthwhile to draw a parallel between the name of the "euro-market" and its territorial location or to link it to a single currency that is considered international in Europe.

World financial markets are sometimes considered in terms of the maturity of financial assets. According to this classification, it is possible to single out the market of those monetary documents, the maturity of which is not more than a year. And assets with which it is possible to carry out certain operations for more than one year, as a rule, are circulated in the capital market. The market of short-term monetary documents allows various companies and firms to maintain their own solvency and liquidity. For example, if it is necessary to increase the authorized capital, the bank's board makes a decision to increase the number of shares. Thus, the balance of own funds is established and one does not have to resort to borrowing funds from other banks or organizations.

According to the issue, the world financial market is divided into primary and secondary. The primary market is understood to be the market at which the assets directly issued by the issuer are circulating. On the secondary market, securities are sold by other economic entities that have already acquired them earlier from issuers.

The structure of the world market largely depends on the organizational trait, according to which it is divided into stock and unorganized. In an unorganized market, transactions can be conducted through an intermediary or directly between participants without going through an additional check. Dividends on such transactions are generally higher than would be on the exchange market, since there is a fairly high risk of non-return of funds. In an organized financial market, every security undergoes a thorough check, called a listing. That is why asset owners can be assured of their reliability, and the risk for such operations is much lower, which explains the low income.