Role of financial markets.
- Facilitating savings or pension schemes, such as
through a platform called ‘pension bee.’
- Facilitating lending - to lend money to firms and
individuals who need more cash.
This can be in the form of business loans such as a
mortgage.
- Facilitating exchanging - to provide an opportunity
for firms and individuals to exchange.
An example is the transfer of money through bank
apps.
- Providing a market for equity - a market in which
equity can be bought and sold.
Equities are sold through banks as an alternative to
loans, as many institutions prefer not to pay
interest.
Therefore, firms buy equity, which is the process of
selling shares (a portion of the company) to
investors, through which they make large profits.
An example is when uber had 255m shares (equivalent
to 17.5% of the company), which they sold to
international banks, who then sold them to investors
so that uber could keep track of them.
- Providing a forward market - special contracts that
guarantee that a trade happens at a later date, at a
certain price.
This means that there is a fixed price and future
date, meaning you will know how much you will pay and
when you will receive it.
This is common for commodities such as copper, which
is a primary product, so likely to have significant
price instability.
This is also common for currency, as its (the
exchange rate) tends to be very volatile as there are
- Facilitating savings or pension schemes, such as
through a platform called ‘pension bee.’
- Facilitating lending - to lend money to firms and
individuals who need more cash.
This can be in the form of business loans such as a
mortgage.
- Facilitating exchanging - to provide an opportunity
for firms and individuals to exchange.
An example is the transfer of money through bank
apps.
- Providing a market for equity - a market in which
equity can be bought and sold.
Equities are sold through banks as an alternative to
loans, as many institutions prefer not to pay
interest.
Therefore, firms buy equity, which is the process of
selling shares (a portion of the company) to
investors, through which they make large profits.
An example is when uber had 255m shares (equivalent
to 17.5% of the company), which they sold to
international banks, who then sold them to investors
so that uber could keep track of them.
- Providing a forward market - special contracts that
guarantee that a trade happens at a later date, at a
certain price.
This means that there is a fixed price and future
date, meaning you will know how much you will pay and
when you will receive it.
This is common for commodities such as copper, which
is a primary product, so likely to have significant
price instability.
This is also common for currency, as its (the
exchange rate) tends to be very volatile as there are
