The global financial market is considered as a single market for loan capital of residents of different countries. It began to form back in the 60s, when they began to actively enter into transactions between representatives of different countries, that is, international operations developed.
In the process of the merger of many companies from different countries, international organizations, companies and firms that are free to carry out their activities at the international level began to form. This, in turn, contributed to the convergence of domestic markets, and subsequently a single global financial market was formed. This happened thanks to the legislative revenues of the government and the softening of their own borders. And the development of economic relations between countries carried out in this market is associated with the continuous improvement of computer technology and the development of new means of communication.
The global financial market and its structure.
If we consider the term "global financial market" as a circulation of financial assets at the international level, then it is conditionally divided into external and internal. Domestic financial markets are divided into two categories: the market for operations in international currency and the national one. The latter, of course, occupies a large part of all the country's operations, that is, the sale and purchase of any securities or other assets are carried out only in the currency of that country. The market in which transactions with securities in foreign currency are held is not as large in scale of operations as the previous one, and it is also subject to strict control by the state.
The global financial market also includes such a component as foreign markets. External to this country is the market of other countries in which the movement of financial assets is made in the currency of that state. It is conditionally divided into foreign and international or the European market. Transactions are made on the international market in a currency that does not belong to the issuing country of the securities. However, you should not draw a parallel to the name "Euromarket" with its territorial location or tie it to one single currency, which is considered international in Europe.
World financial markets are sometimes viewed in terms of the maturity of financial assets. According to this classification, one can single out the market for those monetary documents whose maturity is not more than a year. And assets with which it is possible to carry out certain operations for more than one year, as a rule, circulate in the capital market. The market for short-term cash documents allows various companies and firms to maintain their own solvency and liquidity. For example, if it is necessary to increase the authorized capital, the bank's board decides to increase the number of shares. Thus, a balance of own funds is established and there is no need to resort to borrowing funds from other banks or organizations.
According to the emission criterion, the global financial market is divided into primary and secondary. Primary is understood as the market in which assets directly issued by the issuer are traded. In the secondary market, securities are sold by other business entities that have already purchased them from issuers.
The structure of the world market largely depends on the organizational attribute, according to which it is divided into exchange and unorganized. In an unorganized market, transactions can be conducted through an intermediary or directly between participants, without undergoing additional verification. Dividends on such transactions are usually higher than they would be on the exchange market, since there is a rather high risk of non-return of funds. In an organized financial market, every security undergoes a rigorous audit called listing. That is why asset owners can be confident in their reliability, and the risk of such operations is much lower, which explains the low income.