Category: Money tips Release Date: 2005-12-24
Divided by subject matter: the money market, capital markets, foreign exchange market and gold market
1. Money market refers to the period of less than 1 year of financial assets, the transaction subject matter of the short-term financial markets. The main function of this market is to maintain the liquidity of financial assets in order to readily converted into real currency. Its existence, on the one hand to meet short-term funding needs of borrowers, it also temporarily idle funds to find a way out.
Two. Capital markets means that more than one year maturity of a financial asset transactions. These mainly include: First, the bank and long-term loan market, the other is the securities market. However, due to two reasons, the general capital market can be regarded as the securities market. First, the stock market in the world's major countries of the two major long-term capital market, the most important; secondly, from the world financial market development trends, asset securitization, especially long-term asset securitization has become a trend, constitutes a in today's world the main characteristics of asset activity.
In general, capital markets, mainly refers to the long-term bond market and stock markets. The difference between it and the money market:
(1) The duration of the difference. Capital Markets are financial instruments traded on more than one year, the longest up to several decades, some even indefinitely, such as stocks. The money market transactions are generally less than one year of financial instruments, the shortest only a few days.
(2) The same role. Money market intermediation of funds, mostly for industrial and commercial enterprises in the short-term working capital. The capital market intermediation of funds, mostly for businesses to create, update, expand facilities and storage of raw materials.
(3) different risk. Money market instruments because of the credit period is short, so the high mobility, the price will not change dramatically, with less risk. Capital markets, credit instruments, due to a long time, liquidity is low, price changes by a big margin, the risk is higher.
3. Foreign exchange market, refers to two different currencies denominated notes exchanged between the various short-term financial asset transactions.
4. The gold market, is focused exclusively on the trading in gold trading center or place.
