Financial Market and Institution
Financial Market * a kind of market where the financial management operates, no physical existence, it only involved money, consist of the legal and tax framework.
Financial Institutions * refers to banks, lending companies, credit cooperatives, pawnshops, insurance companies, government agencies (SSS, GSIS, PHILHEALTH, PAGIBIG).
Why do Financial Market exists? * In order to facilitate the interaction between providers of capital such as savers and investors and users of capital such as companies and government.
Capital Market * Is a market for financial assets which have a long or indefinite maturity. Unlike money market the capital market instruments become mature for the period above one year.
Significance, Role or functions of Capital Market 1. Mobilization of savings * capital market is an important source for mobilizing idle savings from the economy.
2. Capital formation * is net addition to the existing stock of capital in the economy.
3. Provisions of investment avenue * revises sources for longer period of time.
4. Speed up Economic Growth and Development * enhances production and productivity in the national economy.
5. Proper Regulation of Funds * Capital markets not only helps in fund mobilization, but also helps in proper allocation of these resources.
6. Service Provision * Provides various types of services includes long term and medium term loans to industry, underwriting services, consultancy services, export finance, etc.
7. Continuous Availability of Funds * This is a liquid market as it makes fund available on continues basis.
Money Market * Market for short-term debt securities, such as banker’s acceptances, commercial paper, negotiable certificates of deposits, and treasury bills with a maturity of one year or less and often 30 days or less.
Functions:
1. It finances temporary cash deficits of banks
2. It insures stable supply of short-term funds of savers.
3. With the
Financial Institutions * refers to banks, lending companies, credit cooperatives, pawnshops, insurance companies, government agencies (SSS, GSIS, PHILHEALTH, PAGIBIG).
Why do Financial Market exists? * In order to facilitate the interaction between providers of capital such as savers and investors and users of capital such as companies and government.
Capital Market * Is a market for financial assets which have a long or indefinite maturity. Unlike money market the capital market instruments become mature for the period above one year.
Significance, Role or functions of Capital Market 1. Mobilization of savings * capital market is an important source for mobilizing idle savings from the economy.
2. Capital formation * is net addition to the existing stock of capital in the economy.
3. Provisions of investment avenue * revises sources for longer period of time.
4. Speed up Economic Growth and Development * enhances production and productivity in the national economy.
5. Proper Regulation of Funds * Capital markets not only helps in fund mobilization, but also helps in proper allocation of these resources.
6. Service Provision * Provides various types of services includes long term and medium term loans to industry, underwriting services, consultancy services, export finance, etc.
7. Continuous Availability of Funds * This is a liquid market as it makes fund available on continues basis.
Money Market * Market for short-term debt securities, such as banker’s acceptances, commercial paper, negotiable certificates of deposits, and treasury bills with a maturity of one year or less and often 30 days or less.
Functions:
1. It finances temporary cash deficits of banks
2. It insures stable supply of short-term funds of savers.
3. With the