The essence of the market and its structural elements
For normal development of the economy requires the mobilization of temporarily free of physical and legal persons, their distribution and redistribution on a commercial basis between the various sectors of the economy. These shall be the financial markets.
Financial market - a market in which supply and demand are determined by a variety of financial instruments.
Financial markets exist as a set of interrelated and interacting markets:
credit market - is a mechanism by which to set the relationship between enterprises and individuals in need of financial resources, and organizations and individuals who can provide the necessary funds to certain conditions;
exchange market - a mechanism by which establishes the legal and economic relationships between buyers and sellers of currencies;
the stock market - a market that combines part of the credit markets: instruments of the loan or debt instruments and market the property, ie, This market covers operations for the production and handling of loan instruments, tools, property, and their hybrids;
In another approach, the structure of financial markets allocate:
• cash market;
• The market for short-term means of payment, which perform functions such as cash (checks, bills of exchange);
• currency market;
• the capital market;
• debt capital market, ie market for short-, medium-and long-term bank loans.
In terms of the impact of the financial market of financial instruments as a set share of the money market and capital market.
Money market - a market of cash, short-term lending, currency. In the money roar address short-term instruments, their movement due to differences in income levels and risk.
Capital market - is:
• part of the market, where a supply and demand in the medium and long-term borrowing;
• specific sphere of relations, the object of which is provided in the loan capital and cash generated supply and demand for it;
• segment of loan capital, where operations are carried out on the medium-and long-term finance and operations with securities (stocks, bonds).
Capital market is divided into the stock market (investment vehicles) and the market and long-term bank loans.
Capital market - the major source of long-term investment of resources.
In terms of the sources of the financial market to raise funds include:
• debt markets or credit markets. With the help of financial instruments business entities borrow money and use it for their needs.
• Equity Capital Markets. With stock investors can join the money to invest in a particular project.
The main function of the financial market - the transformation of surplus funds in the loan capital. The financial market does exactly cash funds available to all its members (the state, businesses, households), which have the same goal - a capital increase.
It should provide a brief description of the individual segments of the financial market.
Credit market - is a specific sphere of economic relations, where the object of transactions appears granted on certain conditions on loan capital.
This market has the following functions:
- Consolidation of small, isolated population of savings, government agencies, private businesses, foreign investors and create large cash funds;
- Transformation of money in loan capital, which provides the external financing of material production of the national economy;
- Lending to the public authorities and the community to address such important issues as the deficit of the state budget, funding for various social programs.
Foreign exchange market - a mechanism by which sets out the legal and economic relationship between sellers and buyers of the currency.
Foreign exchange market has the following functions:
• Timely implementation of International Settlements;
• regulation of exchange rates;
• diversification of foreign exchange reserves;
• exchange risk insurance;
• profit participants of the currency market as the difference of exchange rates;
• conducting monetary policy, based on the state regulation of the national economy and the implementation of agreed policies in the world economy.
Currency market of Ukraine - is mostly interbank market. The subjects of the foreign exchange market are sellers currency, buyers and brokers. These roles include the following:
- Commercial banks - large multinational, medium and small banks, which have a tendency to focus on the major stock exchanges in the operations;
- Non-bank financial institutions - hedge funds (primarily hedge funds) and pension funds. These agencies directly in the market do not speak, and enjoy through the bank;
- Organizations and individuals.
International market - set in currencies, which act on the free world market in the home country currency. The set of operations with currency, which acts on the free world market outside of its country of origin, to the Euromarket.
Securities market covers a sufficiently broad set of social relations that arise and exist in securities, including government and institutional and legal their regulation.