The main types of financial markets. Types of international financial markets

The sphere where financial assets are realized and economic relations are built between buyers and sellers of these assets is the financial market, whose role is growing with time, as it is a mechanism for free movement of capital between citizens, enterprises, industries and territories. Types of financial markets and will be considered in this article.

Definition

Experts are still discussing the structure of the financial market and are trying to make a definition that fully characterizes this phenomenon. Especially a lot of misunderstandings about the structure. Markets are allocated on the basis of the urgency of transactions, the regional principle, the use of certain financial instruments, the components of organizational moments, the forms of operation, and so on. Types of financial markets in Russia since 2010 differ with respect to the instruments used, and they are divided into securities markets, pension and insurance products, cash and derivatives.

The securities market considers promissory notes, investment shares, mortgage certificates, options of the issuer, bonds, shares, privatization papers and government bonds as the main financial instruments . On the insurance segment, other types of financial markets operate, only the contract of the insurer and the insured is needed here. Derivative instruments used in such markets are contracts - futures, options and others under the standard, in addition - options, forward and other transactions related to urgent. The money market uses such means as loans, deposits and other debt obligations.

Functions and prospects

Detailed data on the supply and demand for financial resources, the formation of prices for them are functions that provide information to all types of financial markets. Every detail is important here, and the quality, changes and growth and evolution of this part of human activity, together with the development of the entire world economy, depend on the quality of this work. A huge role is assigned to these functions of globalization and the organization of the international financial market. This process is very gradual, but, judging by the results of the activity of world capital, it is developing steadily.

Classification and types of financial markets are so often and widely used in everyday speech, that the ambiguity of rapidly gaining capitalization is literally staggering. The concept is largely generalized, but behind it are numerous independent definitions, for professionals composing a whole system, each element of which is classified according to various criteria. In the classical version, the classification and types of financial markets are no longer only on the ear, but also in the arms of every housewife, since the turnover of capital, even the most insignificant, requires certain knowledge.

General classification

First of all, we need to understand the criteria of classification division. Each subspecies of the financial market has its own notion, and the types of financial markets are aimed at a completely different functioning. The following are the most important from the criteria of division.

1. Assets and conditions for their circulation: the primary or secondary financial market is involved.

2. By the degree of organization, a loosely organized over-the-counter and well-organized exchange markets are distinguished .

3. Transactions and urgency of their implementation: spot markets or urgent ones are chosen.

4. Convertible assets and their types: the insurance or foreign exchange market, the market of credits, securities or precious metals can be used.

5. In the sphere of distribution, financial markets are of different levels: world and national, regional and local.

6. The main criterion determining the concept and types of financial markets is the period in which assets exist. It can be a long-term capital market or simply a money market.

Primary and secondary

The primary financial market exists for financial assets that are sold for the first time, that's where their first customers appear, which is due to the name itself. The sale and purchase is preceded by either the issue of the respective assets or the issue. Financial markets, their essence and types help the movement of cash flows and securities in the right and most appropriate direction. In the primary market, there are investment dealers (underwriters) who are responsible for placing these financial assets.

They buy up all or a significant part of the volume of securities that were issued, then sell to third-party buyers, and, naturally, make the latter on a reimbursable basis. Further, financial assets (in the form of securities or others) may have subsequent transactions that are already made in the secondary market, regardless of the object that is a party to the transaction. The primary market lets cash flows flow, such are its functions. Types of the financial market provide for a long and qualitative capital flow. The secondary market here is absolutely indispensable because it is there that the most important characteristics of the financial instruments used are identified, such as liquidity or riskiness. These are the main types of financial markets.

History of the stock market

Securities began their rotation several centuries ago. Another fifteenth century is characterized by the creation of state securities markets. In order to cover the shortage of money, different countries started to issue and place their own securities not only inside the country, but even abroad. So, in 1556 such an exchange opened in Antwerp. And in the sixteenth century a number of functioning stock exchanges, including international ones (Bruges), already existed. The technology of exchange transactions was improved, foreigners were given special attention.

So there were new concepts: exchange rate, stock exchange bulletin. However, the types of international financial markets have not yet been formed. The publication of the list of prices on this exchange of all securities sold marked the beginning of the existence of the stock exchange as an independent special organization. In the seventeenth century, the Netherlands became the center of exchange trade, where, in addition to domestic loans, English securities were involved.

Becoming

Non-state shares appeared at the same time - on the Amsterdam exchange, when the East India Company announced a subscription to participate in profits, thereby affecting the types and formation of financial markets. With the help of shareholders, this trading company for three hundred years, took out and sold almost all the wealth owned by India. Amsterdam, accordingly, was enriched by being an intermediary, not only trading shares for cash, but also conducting urgent deals, thus forming the first speculative exchange market. In the eighteenth century, England intercepted this initiative, opening the stock market and the OTC market, it was called a street market. Brokers of London made deals in coffee shops and directly on the pavement.

Types, the structure of financial markets in those days were quite unordered. In France, it was done somewhat differently. At the end of the eighteenth century, a bill exchange was opened in Paris, where only official brokers conducted transactions. For a long time, even prices were not openly announced, and the procedure for trading on the exchange did not know the public. The government oversaw the exchange, supervising all securities movements. Over time, the exchanges were already everywhere, and they got universality: they opened both specialized financial and commodity-commodity exchanges.

Exchange and OTC markets: differences

In most developed countries, the trend of exchange trade was the same: first there was trade in bonds of the municipality, government, railway companies, stocks were rare. However, in the nineteenth century, the joint-stock form began to prevail. The twentieth century gave stock exchanges not only the quantity, but also the quality of trade, as new technologies appeared. In the middle of it appeared an organized over-the-counter market, the basis of which was computerization. However, exchange and over-the-counter markets still differed radically from each other, including their activities in the financial market.

It is necessary to consider the functions of each of these institutions and make a comparative analysis in order to identify all the similarities and differences. The exchange market, unlike the over-the-counter market, has a listing and a high concentration of supply and demand. There are very strict rules of trade and absolutely all transactions are registered, the level of risk is therefore not so high. In addition, all bidders must necessarily have a license. Over-the-counter financial market does not have listing, there is low concentration of demand and supply, there are no strict rules and registration of transactions, no license is asked from traders, and therefore the risk level is much higher. These are the essence, types and functions of the financial market.

Multi-level, specialized, urgent and spot markets

Urgent financial markets are characterized by a certain time lag between the time of conclusion and execution of the transaction, the time limits are usually limited to five days. Derivatives - stock and commodity options and futures, which refer to derivatives among the main instruments of finance, are most often used here. In spot markets, the conclusion of a deal involves immediate execution of it. Types and types of financial markets include specialized, the most simple to understand. It can be seen from the name, what are the functions of a specialized market: the currency market trades currency, insurance policies, and so on. Only the securities market dominates here: the more the economy of the country is more developed, the higher the share of securities on the markets, if the total volume of transactions is considered.

Multilevel financial markets have their own "line" - it's global, national, regional and local, this has already been mentioned in the list of species. National markets collectively organize the world financial market. Each national inevitably consists of all regional, as the administrative-territorial division suggests. In regional all the local financial markets are integrated. It's simple. At the level of local market relations, a large number of transactions with individual traders of securities, insurance and banking institutions on the one hand and with investors working privately on the other. That's considered almost everything, except the two main types of financial markets.

Money market and capital market

These are the most important varieties of the financial market. All that can be linked to cash and non-cash settlements, and, in addition, all transactions where short-term financial instruments are used (up to twelve months of circulation) applies to money. The capital market includes a huge number of transactions and trading operations relative to assets and long-term financial instruments, where the circulation period is more than a year. This is a key difference between capital and money markets. Real capital in the modern world still retains its great importance, but for several decades capital has been dominating financial, in the form of securities and money. In the economy, thus, two sectors coexist, as real and financial capitals do not merge with each other. The financial sector is based strictly on financial capital and produces services of the same order, and the real sector is based on real capital, produces goods and sells non-financial services.

Capital markets are segments that sell financial assets, its structure is quite heavily ramified and consists of the credit and currency markets, derivatives markets, insurance services and stocks. By the way, the stock market in the integration with the credit part of it is formed by the stock market. The capital market is characterized by a huge number of different operations, corresponding to its main segments. These are currency transactions, derivatives, insurance services, bank loans, debt and government securities, and all operations in the stock market. Shares and bonds are the most popular of the means of investing capital, since they can be sold at a certain time on the securities market (stock) at a certain time.

International Currency Market

Relationships in the international currency market are established between entities - banking and non-banking institutions, companies, individuals and so on. The object of the international foreign exchange market is any monetary claims that are expressed in cash and foreign currency. Earlier, the currency was traded only on certain exchanges, and this continued until the over-the-counter relations began to develop. The formation of currency trading occurred through many factors: changes in the international monetary system, financial regulation, trade liberalization, the development of new technologies, innovations in the theoretical and practical economy.

Conventionally, the international currency market is divided into two parts - where they trade in separate currencies and where separate instruments of the market are used. Participants are also divided into several categories by occupation.

1. Transfers of international transactions.

2. Immediately carry out a direct investment of capital - investments in stocks, bonds and the like.

3. Constantly working in the money market and operating with short-term operations.

The main advantage of the international foreign exchange market is its maximum liquidity, with the bulk of all transactions accounted for over-the-counter (over ninety percent). Participants are small and large banks, dealers, investment organizations, various funds, central banks of different states and brokers. The distinctive features of the international foreign exchange market include the growth of foreign exchange markets in various countries and their internationalization, the continuity of operations, the rapidly developing emergency section, the unification of technology and the improvement of foreign exchange operations, the rapid growth of volumes and risk insurance.

International Stock Market

This is an element of the capital market, where the main activity is connected with the issue of securities and the operations of purchase and sale, where they participate. There is an extensive trade in various stock values, which are expressed in various world currencies. The formation took place due to the development of integration processes, the organization of banking and exchange activities of different countries, the active use of national monetary units and sufficient stability of exchange rates.

The international stock market requires qualitative parameters of the economies of countries that directly depend on technology and the level of the sphere of the economy, as well as a stable legislative base and many other qualities. The level of investment will depend on how effective the system of laws is in relation to financial markets and assets, also the rules under which the tenders are conducted and the state's protection of the property rights of both local and foreign investors are important.