Financial markets
Financial markets enable the trading of financial securities such as bonds, equities, derivatives, and currencies. There are broadly three types of markets: money markets, credit markets, and capital markets:
- Money markets are short-term markets where money is lent to companies or banks for interbank lending. Foreign exchange, or forex, is another category of money markets where currencies are traded.
- Credit markets consist mostly of retail banks that borrow money from central banks and loan it to companies or households in the form of mortgages or loans.
Retail banks are commercial banks that offer financial products and services to individuals and businesses, whereas central banks oversee the monetary system and regulation of the financial system of a country.
- Capital markets facilitate the buying and selling of financial instruments, mainly stocks and bonds. There are many types of financial instruments, such as...
