Articles on Financial Markets and Institutions

Introduction to Financial Markets and Institutions

There are certain types of financial markets and financial institutions that are found in almost every country in the world....

The Functions of a Financial System

Financial resources are scattered across the economy. This is the reason that there is a need for a financial system...

Financial Systems and Economic Development

Financial institutions and markets are together called the financial system. This financial system is the backbone of the national economy....

The Role of Government in Financial Systems

In the previous articles, we have already established that the financial system of any country is the key to its...

Comparing Different Financial Systems

Economists all over the world are of the opinion that markets are the best system for allocating scarce resources. However,...

The Flow of Funds in a Financial System

The economy of any nation can be viewed from the point of view of fund flow. This is a unique...

The Case for a Bank Based Financial System

Most economists in the world believe that the market system is the most efficient way of allocating resources. However, there...

The Design of the Central Bank

The banking system is an integral part of the financial system of many countries. In fact, as we have discussed...

Why are Banks Closely Regulated?

The banking system forms the bedrock of any financial system and even the entire economy. This is because the banking...

Primary Markets vs. Secondary Markets

The buying and selling of financial securities is a complex process that has evolved over many years. Each security represents...

Money Markets vs. Capital Markets

Financial markets are markets where financial instruments or securities are traded. Financial markets can be classified based on various parameters....

Dealer Markets vs. Broker Markets

Markets across the world can also be segregated based on the type of intermediary. Prima facie, it may appear that...

Over the Counter Markets

Over the counter markets are a particular type of financial market. Generally, financial markets are centralized. This means that there...

Wholesale Financial Markets

The financial services industry can be divided into two sectors viz, the retail and the wholesale sector. On one hand,...

How do the Derivative Markets Function?

Derivative markets are unique kinds of markets where derivative instruments are traded. As we already know, derivative financial instruments are...

Exchange Rate Regimes

International trade is a vital component of the economy of any nation. Also, international trade is highly dependent upon exchange...

How do Pension Plans Work?

The main objective of the financial system is to allow the participants to meet their financial goals. One common goal...

Advantages of a Digital Depository System

In the previous article, we learned about what a digital depository system is and how it functions. We also understood...

How Securities are Priced in the Primary Market

We already know that primary financial markets are used by firms to raise funds from investors. This is done by...

The Use of Reference Rates in Financial Markets

Debt securities are widely issued and traded in the secondary market. Debt securities could have a fixed interest rate or...

The Concept of Stock Keeping Units (SKU’s)

Companies like Wal-Mart are often credited with bringing in technology to the retail business. Prior to multinational companies introducing technology,...

The Financial System and Basel Accords

In the previous articles, we have already read about how banks are the main pillars of the financial system. It...

The Clearing House System

There is much more to the international financial system than what meets the eye. For instance, if you were to...

The Federal Wire System

What is the Fed Wire System? The Fed Wire system is a service that is offered by the Federal Reserve,...

The SWIFT Network

We live in a technological age today and hence are afforded many conveniences which people in the prior generations did...

Stress Testing to Manage Risks in Financial Institutions

What is Stress Testing? Stress testing is a type of simulation model which is used to manage risks in banks...

The Quasi-Government Sector

In most parts of the world, the financial system can be divided into two parts viz. the private sector and...

Housing Finance

The purpose of financial resources is to mobilize savings. In most cases, these savings are generated by households and are...

Importance of Market Data in Financial Markets

Financial markets move on the basis of data. If one party consistently receives information faster than the others, then the...

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Articles on Financial Markets and Institutions