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    Financial markets and institutions play a primary role in allocating capital in the economy. Financial markets can be categorized as primary or secondary markets, and money or capital markets, depending on whether the financial instruments are being issued for the first time or traded afterwards, and whether the maturity is less than or greater than one year. Other financial markets include foreign exchange markets, derivative security markets, and financial institutions help channel funds from those with surplus to those with shortages by reducing transaction costs, allocating credit, and providing payment and maturity intermediation services. Emerging financial technologies are increasingly competing with traditional financial methods.

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    Notes on Financial Marketing

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    Financial markets and institutions play a primary role in allocating capital in the economy. Financial markets can be categorized as primary or secondary markets, and money or capital markets, depending on whether the financial instruments are being issued for the first time or traded afterwards, and whether the maturity is less than or greater than one year. Other financial markets include foreign exchange markets, derivative security markets, and financial institutions help channel funds from those with surplus to those with shortages by reducing transaction costs, allocating credit, and providing payment and maturity intermediation services. Emerging financial technologies are increasingly competing with traditional financial methods.

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    16 views1 page

    Financial Marketing Introduction

    Uploaded by

    rera zeo
    Financial markets and institutions play a primary role in allocating capital in the economy. Financial markets can be categorized as primary or secondary markets, and money or capital markets, depending on whether the financial instruments are being issued for the first time or traded afterwards, and whether the maturity is less than or greater than one year. Other financial markets include foreign exchange markets, derivative security markets, and financial institutions help channel funds from those with surplus to those with shortages by reducing transaction costs, allocating credit, and providing payment and maturity intermediation services. Emerging financial technologies are increasingly competing with traditional financial methods.

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    I.

    Introduction
    A. Importance of financial markets and institutions
    1. Primary channels which capital is allocated in our economy
    B. Definition
    1. Financial markets are structures through which funds flow
    2. 2 Dimensions
    a) Primary vs secondary
    (1) PRIMARY = RAISED THROUGH NEW ISSUES OF
    FINANCIAL INSTRUMENTS SUCH AS STOcks and
    bonds. Initial public offerings (IPO)
    (2) Secondary = trade financial instruments once they are
    used
    b) Money vs capital market
    (1) Money = useful life and maturity of less than 1 year
    (2) Capital Market = more than 1 year
    C. Foreign Exchange markets
    1. FX risk is the sensitivity of the value of cash flows on foreign investments
    to changes in currency
    D. Derivative security markets
    1. The Financial instruments value depends on the value of another asset
    2. Traded in derivative security markets
    E. Financial Market regulations
    1. Regulations by the SEC
    2. SEC monitors the trading of financial instruments
    F. Financial Institutions (FI)
    1. Perform the function of channeling funds with surplus to those with
    shortages
    2. Without FI, fund flow would be low due to:
    a) Monitoring cost
    b) Liquidity
    c) Price risk
    3. Benefits of FI
    a) Reduced transaction cost
    b) Credit allocation
    c) Payment services
    d) Maturity intermediation
    G. Fintech
    1. Use of technology to deliver financial solutions to compete traditional
    methods
    2. Examples such as Cryptocurrency

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