The world financial market is a part of the world market money capital financial institutions.
The monetary part of the financial market consists of the financial and credit sectors, represents the entire market in aggregate and in terms of turnover and income. That is, money constantly rotates in the market sectors listed below.
- market valuable papers;
- credit market;
- investment market;
- insurance market;
- currency market.
The structure of the financial market is divided into capital and money markets.
Market money market short credit operations for a period not exceeding one year.
The capital market includes operations of any term, bonds and stocks. It is the most important source of long-term investment.
Financial market denotes a list of the most effective economic spheres for the application of money. Depends heavily on how the market works. interest rates. Their formation is main function market, directly affecting the level of economic efficiency in the world.
Functions of the financial market:
– servicing the population and the state to cover consumer public spending as a source of capital;
- servicing the circulation of goods through credit;
– increased centralization and concentration of capital;
- accumulation of cash reserves of the population, the state and enterprises;
Financial Market Participants
In the world of the market, the broker is the intermediary between the seller and the buyer. He has the right to perform actions with any securities (financial market instruments). The constant functioning of the securities market ensures.
Financial agents serve the market by accepting money for safekeeping for a certain reason, for example, for interest. The formation of such financial intermediaries requires sufficient a large number time. These days they carry on maintaining stability financial support economic and social needs with the acceleration of the level of development of production. Also, intermediaries are engaged in saving money resources.
The duration of financial intermediaries is beneficial for entrepreneurs and owners
savings, as it leads to profits for all parties that are market participants.
The list of intermediaries includes tanks and credit organizations. However, in addition to this, investment and Insurance companies. Their main difference from banks is that they do not affect the circulation of funds in the economy.
World financial centers
It implies the joint work of banks with credit financial institutions who carry out financial operations with securities, metals and different currencies. This is a very important part market economy on which a lot depends. the world's largest financial centers You can call London and New York.
Financial market instruments
financial instruments are called monetary obligations certain economic entities documented in accordance with current legislation.
Financial instruments include checks, bills of exchange, bonds, shares, IOUs, certificates, insurance policies, credit cards, mortgages and other evidence.
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a mechanism for the redistribution of Capital between creditors and borrowers with the help of intermediaries based on the demand and supply of capital
Great Definition
Incomplete definition ↓
Financial market
totality market institutions directing the flow of funds from owners (owners) to borrowers. Efficient development agroeconomics requires a developed financial market, which organizes and regulates economic relations that arise between sellers and buyers of financial assets - money and their derivatives - securities. The financial market is diverse, it includes money, credit and stock markets. On stock market financial (portfolio) investments are made, and securities are the subject of sale and purchase. It is actually the financial market. An objective prerequisite for the formation of the financial market is the discrepancy between the need for funds from enterprises and organizations and the presence of a source of its satisfaction. Temporarily free cash are available to some enterprises and citizens, and investment needs arise from other enterprises and the state. The former act as savers (owners), while the latter act as investors (users). Users (investors) invest in objects entrepreneurial activity(expansion and modernization of the production of goods and services, covering the temporary budget deficit). Mobilization of temporarily free funds for their further investment is carried out by organizing circulation in the financial securities market. The financial market is divided into primary and secondary. Securities of new issues are sold on the primary market, and their further resale is carried out on the secondary market. The possibility of resale is associated with the free circulation of securities (the initial investor has the right to own and dispose of them), as well as changes in the market value of securities due to a changing assessment of the risk factor of investing in the issuer's securities and financial results its activities (the amount of profit and its distribution). The purpose of the primary market is to attract additional financial resources, and secondary - the redistribution of funds between economic entities. The fulfillment of these tasks requires information openness and reliability of information about the actual financial position and development plans of issuers, which necessitates their independent verification - audit. The stock market organizes priority financing of production and social programs; provides a civilized way to transfer capital from less efficient industries and enterprises to more efficient ones, as well as the participation of savers in the income of investors; allows to mobilize temporarily free funds of enterprises and citizens for non-inflationary coverage of the emerging deficit state budget. At present, the financial capital of agribusiness enterprises is in the process of formation and development. The funds allocated for the development of production represent the capital of the enterprise. Structurally, capital consists of funds invested in various assets of the enterprise. Assets are the costs of forming the property rights of an enterprise, i.e., the rights to own, use, and dispose of property. Assets consist of two large groups that differ in their role in the formation of production costs and are called non-current and current. Non-current assets are assets that participate in the formation of the cost of products and services during several production and trading (operational) cycles. Intangible assets are funds invested in objects, the material form of which is not decisive for their economic use, acquired not for resale, and generating income over a long period. These include the right to use land plots and objects of nature management, patents, licenses, copyrights, the cost of business reputation of the enterprise. Other fixed assets includes construction in progress, long-term financial investments etc. Long-term financial investments include investments in other organizations, loans granted to other enterprises for a period of more than 12 months, and other long-term financial investments. If non-current assets represent the immobile part of the assets, then current (current) assets, on the contrary, represent the mobile part of the enterprise's assets, they take part in the production and trade process once. current assets in monetary terms are represented by working capital (working capital of the enterprise), include working capital and circulation funds. They are closely interconnected. Basic and working capital are reflected in the assets of the balance sheet of the enterprise, which are usually grouped in descending order of liquidity into: cash and equivalent financial assets (A1), accounts receivable(debt of buyers to the enterprise - A2), stocks of raw materials and finished products and costs of work in progress (A3), fixed assets and other non-current assets (A4). Each of the assets must be financed from an appropriate source - a resource, and there is the following rule: the time for which the source is attracted, and its volume (the amount of funds) must correspond to the duration of the turnover and cost financial asset created at his expense. This rule is a guarantee financial stability enterprises. Sources of financial resources are divided into own and attracted. To own sources financial resources include the authorized capital formed from the contributions of the founders, profit and depreciation, as well as the reserves accumulated by the organization, the source of which is profit. The attracted sources of financial resources include borrowed and borrowed funds. Borrowed funds- these are credits and loans that enterprises receive on terms of repayment, payment and urgency. Borrowed funds are divided according to the terms of borrowing into long-term (the term of attraction is more than 1 year) and short-term (up to 1 year). Funds raised are accounts payable, i.e. the money of creditors (suppliers, employees, budget), which the company can certain time free to use. Sources on the company's balance sheet financial resources it is customary to reflect in liabilities and divide into the following groups: accounts payable (P1) and short-term loans and loans (L2), which are grouped into current liabilities, and long-term loans and borrowings (L3) and equity (L4), which are grouped into stable liabilities. The activity of an enterprise in financial management is reduced to solving three groups of tasks: the financial analysis and financial planning; providing the enterprise with financial resources (managing sources of financial resources), maintaining financial stability; distribution of financial resources (asset and capital management), profitability and risk management. Financing decisions made at the enterprise level cover both the short term (e.g. obtaining a crop loan) and the long term (additional increase authorized capital and attraction long-term loan for the construction of a new livestock complex) prospects. They undoubtedly lead to a change in the profitability and risk of investments in the business of an enterprise, change the competitiveness not only in the commodity market, but also in the capital market. So, an increase in the share equity in the structure of funding sources leads to a decrease financial dependence enterprises and at the same time to the growth of its sustainability, and vice versa. Increasing financial stability leads to a decrease in the amount of profit remaining at the disposal of the enterprise after paying taxes per 1 ruble. own capital. This is the problem of striking a balance between the risk of losing financial independence and sustainability and profitability of equity capital.
1. The concept of the financial market. Kinds financial markets(monetary, credit, currency, property institutions)
1.1 Factors affecting the financial market
1.2 The concept of capital, capital structure
2. Regularities of functioning money market and the capital market (the law of value, the law of supply and demand)
2.1 Demand for capital
2.2 Supply of capital
3. Properties of the loan capital market. Securities market: essence and types (primary, exchange, over-the-counter)
4. The concept of equity. Structure of the equity capital market
5. Market for debt capital
Bibliography
1. The concept of the financial market. Types of financial markets (money, credit, currency, property institutions)
A financial market is an organizational or informal trading system for financial instruments. The task of financial markets is to organize the trading of assets and liabilities between buyers and sellers of financial resources.
Buyers and sellers in the financial markets are three groups of economic entities: households, firms, and the state.
The financial market includes the following types of markets:
The money market is a market in which the commodity is financial instruments with a maturity of less than one year.
In the money market, the main instruments are treasury bills, banker's acceptances and bank certificates of deposit.
The capital market is a market in which the goods are long-term financial instruments with a maturity of more than five years.
In the capital market, the main instruments are long-term bonds, stocks and long-term loans. The capital market is subdivided into the loan capital market and the equity securities market.
On the loan capital market, long-term financial instruments are circulated, provided on the terms of urgency, repayment and payment. It is subdivided into the long-term market bank loans and the debt securities market (also long-term).
On the securities market, both securities themselves and their substitutes are issued, circulated and absorbed.
The foreign exchange market is a market in which the goods are objects that have a currency value.
To currency values include: foreign currency, securities, precious metals and natural gems.
As subjects (participants) foreign exchange market Banks, stock exchanges, exporters and importers, financial and investment institutions, government organizations act. Object of the currency market (to whom the actions of the subject are directed) - any financial requirement, indicated in currency values.
Foreign exchange market entities can perform the following types of transactions:
cash (spot) - with immediate delivery of currency, most often within two business days after the conclusion of the transaction;
urgent (forward) - with the delivery of currency after a clearly defined period of time;
swaps - simultaneous purchase and sale transactions with different terms performance;
hedging (insurance of open currency positions);
arbitration interest rates(gaining benefit from accepting deposits and redistributing them for agreed periods at a higher rate).
The gold market is a sphere economic relations associated with the purchase and sale of gold in order to accumulate and replenish the country's gold reserves, business organization, industrial consumption, etc.
1.1 Factors affecting the financial market
In general, there are four groups of factors that directly affect the financial market:
economic;
political;
rumors and expectations;
Force Majeure.
The economic group of factors influencing the market can be divided into the following components:
economic indicators;
trade negotiations;
meetings of central banks;
changes in monetary policy;
meetings of the G7, other economic or trade unions;
speeches by heads of central banks, heads of government, prominent economists on the situation on the currency market, changes economic policy, the economic situation in the country or their forecasts;
interventions;
adjacent markets (commodity, stock);
speculation.
In order of importance economic forces can be divided into several groups. The first group includes: discount rate; deficit trade balance; deficit balance of payments; inflation indices; internal dynamics gross product; unemployment data; money supply data.
The second group includes: index business activity; cars sale; sale of housing; orders for durable goods (demand); construction orders; industrial production; retail; personal income citizens; main economic indicators.
The third group includes: deposit rates; stock indices; price dynamics of government bonds.
1.2 The concept of capital, capital structure
Capital is a resource created for the purpose of production economic benefits. Capital can, first of all, be divided into (physical) tangible, monetary and intangible.
Intangible (invisible) capital - knowledge, skills and information that can be used to produce goods and sell them (patents, licenses, copyrights, human skills, trademark etc.).
Intangible capital is otherwise called human capital and, in essence, it is a kind of labor resources. Therefore, capital as such is usually understood as material - physical capital.
Money capital is temporarily free cash that cannot be immediately used to make a profit.
Physical (material) capital is a set of material goods of a special kind (buildings, structures, machines, raw materials, etc.) that are used in the production of goods and services in order to generate income. Physical capital is divided into fixed capital and circulating capital.
Fixed capital - part of the company's assets invested in fixed assets, unfinished long-term investments, intangible assets, long-term financial investments. Fixed capital participates in the production process for a long time (as a rule, more than one year) and gradually, in parts, transfers its value to the cost of finished products.
Sources of financing of fixed capital are divided into own funds economic entity and borrowed.
Working capital is entirely spent during one production cycle (from the beginning of the production of goods to the release of finished products). Working capital is spent on the acquisition of funds for each cycle: raw materials, basic, auxiliary labor materials, etc.
Capital is also the money that a firm or consumer possesses. The money with which the consumer, for example, can purchase the necessary goods for subsequent consumption, and the company - the resources for the production of goods.
Money (or financial capital) can either be owned by a consumer or a firm, or borrowed, that is, they represent borrowed capital.
The financial market includes the money market, the capital market, the insurance market, and the gold market.
The capital market includes:
1. medium and long term market valuable papers(stock market);
2. market for medium and long term bank loans used for capital investments.
Insurance market k - the market of insurance services.
Money market- circulation market short-term financial instruments and making short-term transactions(up to a year). He includes :
1. market short-term loans – the market of banking and other forms of short-term (up to a year) credits;
2. interbank market loans– market of interbank short-term loans;
3. currency markets nk - official centers where the sale and purchase of currencies takes place on the basis of supply and demand;
4. short-term securities market(bills, certificates, short-term government obligations etc.) is a market where the main instruments are treasury and commercial bills and other types short-term liabilities(securities).
Gold Markets– official centers where gold is bought and sold based on supply and demand.
Allocate also futures market – market of derivative securities (futures, options, etc.).
The financial market includes the following major sectors :
the banking sector of the economy;
· stocks and bods market;
the insurance market.
2. financial institutions.
There are the following types of financial institutions :
commercial banks;
Mutual savings banks
· Insurance companies;
non-state pension funds;
investment funds;
financial companies.
1. Commercial banks offer a wide range of services for raising funds from economic entities by offering loans.
2. savings institutions are specialized financial institutions. The main sources of funds are savings deposits, urgent consumer deposits. These institutions borrow money for short periods from checking and savings accounts and then lend it to long term secured by real estate. savings institutions are mortgage lending and real estate financing.
3. credit unions are mutual lending institutions that accept deposits from individuals and lend to members of the union on acceptable terms. The obligations of these unions are formed from savings accounts and checking accounts (shares). Credit unions provide their funds to members of the union in the form of short-term consumer loans. Everyone has one vote when making decisions at general meetings of the union from the number of savings shares (deposits) that they own in this society
4. Savings institutions operating on a contractual basis include Insurance companies and pension funds, characterized by a steady inflow of funds from insurance policy holders and account holders in pension funds. They have the opportunity to invest in long-term high-yield instruments. The activity of insurance companies is an object state regulation and self-regulation – licensing.
5. The market for insurance policies and pension accounts in Russia also has non-state pension funds providing for additional pension provision at the expense of contributions from employers and the working population. They can be created in the form of non-profit organizations.
6. Investment funds operate in the form of investment companies, CJSC, OJSC. They accumulate investors' resources and invest them in money market and capital market instruments, in specialized assets (real estate), specialize in long term investment , releasing financial obligations different denominations, which allows them to quickly sell and buy financial obligations in which the market already exists or buy back their shares at their current market price.
7. Investment company closed type- a fund that sells its shares to get cash to invest, and then limits the number of placed shares among a fixed circle of investors. The specificity lies in the fact that they are engaged investments in traded on the stock market securities rather than real assets.
Exchange governing bodies consist of public and stationary structures.
1. Public structures represented by the General Meeting of Exchange Members and elected bodies, which are formed at the meeting of Exchange Members. General meeting is the legislative body of intra-exchange activity, having the following functions :
Implementation of the general guides stock exchange and stock trading,
Definition goals and objectives of the exchange , strategies its development, internal rules,
Approval and change constituent documents ,
Elections and approval Exchange Committee or the Council and the Audit Commission,
Application changes and additions to their personal composition and structure ,
- admission of new members exchanges,
Statement cost estimates for the maintenance of the Exchange Committee
2. Stationary structure The exchange is represented by specialized and executive bodies.
Specialized Bodies are the commissions of the exchange and its commercial organizations. Among the commissions, the most significant are Quotation and Arbitrage . Quotation commission is necessary in order to organize the accounting of various prices when concluding exchange transactions. Based on the generalization of such prices, quoted prices, which are published in stock exchange bulletins and are considered as a stock exchange directory. In case of disputes between buyers, sellers and brokers, they can contact Arbitration Court - Arbitration Commission. An important subdivision of the stationary structure is clearing house, whose functions are to promptly and accurately carry out settlements on exchange transactions.
Executive bodies of each exchange are very diverse and depend on the volume of transactions made on the exchange, the number of brokerage houses and the type of securities traded on the exchange.
3. professional market participants.
Professional participants of the securities market- it legal individuals, including credit institutions, and physical persons registered as entrepreneurs who carry out professional activity in the securities market. Professional members securities market are brokers, dealers, managers, clearing organizations, depositories, registrars, organizers of trading in the securities market.
1. Broker - professional participant securities market engaged in brokerage activities. Brokerage activities the performance of civil law transactions with securities as an attorney or commission agent acting on the basis of an agency or commission agreement, as well as a power of attorney for such transactions, is recognized in the absence of indications of the powers of an attorney or commission agent in the agreement.
2. Dealer- a professional participant in the securities market, engaged in dealer activities. Dealer activity it is recognized that securities purchase and sale transactions are made on one's own behalf and at one's own expense by publicly announcing the purchase and (or) sale prices of certain securities with the obligation to purchase and (or) sell these securities at the declared prices. In addition to the price, the dealer has the right to announce other essential terms of the securities purchase and sale agreement: minimum or maximum amount purchased and (or) sold securities, as well as the period during which the declared prices are valid.
3. Manager- a professional participant in the securities market, carrying out activities in the management of securities. Securities management activities recognized implementation legal entity or individual entrepreneur on its own behalf for a fee during certain period trust management transferred to him into possession and belonging to another person in the interests of this person or third parties indicated by this person:
· securities;
· funds intended for investment in securities;
· cash and securities received in the course of securities management.
4. clearing organization- a professional participant in the securities market, carrying out clearing activities(clearing). Clearing activity is recognized definition of mutual obligations(collection, reconciliation, adjustment transaction information with securities and preparation accounting documents by them) and their offset on deliveries securities and calculations by them.
5. Depository- a professional participant in the securities market, carrying out depository activities. Depository activities recognized rendering storage services for securities certificates and(or) accounting and transfer of rights to securities. An agreement between a depository and a depositor that regulates their relations in the process of depositary activities is called a depositary agreement (depo account agreement).
6. Registrar (Registrar)- a professional participant in the securities market, carrying out activities for maintaining the register of holders of securities. Under such activities refers to the collection, recording, processing, storage and provision of data constituting the system for maintaining the register of securities holders. Register holders can only be legal entities. Registry is a list registered holders of securities indicating quantity, face value and categories of registered securities they own, drawn up as of any given date and allowing identification of these owners, the number and category of securities they own. The contract for the maintenance of the register is concluded with only one legal entity. The registrar may maintain registers of holders of securities of an unlimited number of issuers.
1.1. CONCEPT, ESSENCE AND FUNCTIONS OF FINANCE
What is a financial market?
Financial market- special form cash transactions, where the object of sale and purchase is the free cash of business entities, the state and the population. It is an institution that links lenders and borrowers by borrowing money from lenders and lending it to borrowers.
It is an organized system for trading financial instruments.
Elements of the financial market structure:
- loan capital market- a system of relations that ensure the accumulation of temporarily free financial resources and their redistribution between enterprises and investors;
- stocks and bods market- regulator money supply. Carries out the whole complex of capital movements in the economy;
- insurance market- a set of redistributive relations between participants at the expense of contributions to the target insurance fund intended to compensate for damage;
- currency market- sphere of economic relations on sale and purchase foreign exchange and payment documents.
What does the foreign exchange market include?
Currency market is a market in which the goods are objects that have a currency value. Currency values include: foreign currency ( banknotes and funds in accounts monetary units foreign state, international or settlement monetary units);
Securities (checks, bills), stock values (shares, bonds) and others debentures expressed in foreign currency;
Precious metals (gold, silver, platinum, palladium, iridium, rhodium, ruthenium, osmium) and natural gems (diamonds, rubies, emeralds, sapphires, alexandrites, pearls).
As subjects (participants) of the foreign exchange market are: banks, stock exchanges, exporters and importers, financial and investment institutions, government organizations.
The object of the currency market (to whom the actions of the subject are directed) is any financial requirement indicated in currency values. Objects of the foreign exchange market are bought and sold by subjects of the foreign exchange market for the money in circulation.
