macro financial markets
Cards (9)
- portable, acceptable, divisible, durable, difficult to forge, scarce
- the stock of existing assets classified as money
- the ease with which an asset can be converted into cash without the loss of money
- part of the money supply made up of physical cash and current account that can be instantly converted into cash
- part of the money supply made up of cash, bank and building society current acccounts, saving accounts and other financial assets that take longer to convert to cash
- consists of the financial institutions who wish to borrow or lend on a short term basis, provides liquidity for the capital market, interbank lending makes up majority of this market
- primary markets: raising finance for firms and the government through issuing new bonds and shares, secondary markets: trading existing bonds and shares such as on the London stock exchange
- foreign exchange markets consist of global decentralised markets for trading of currency, spot market: commodities and currencies traded for immediate delivery, forward market: market place offering financial instruments priced in advance for future delivery
- governments often finance budget deficits by issuing bonds to finance the shortfall - large firms use capital markets to raise large amounts of money either by issuing their own bonds (debentures) or by issuing shares