Chapter 1: Financial Markets Flashcards
what is the financial services sector?
provides the link between organisations needing capital and those with the capital available for investment
what are the top 3 global financial centres?
New York, London and Hong Kong
What is the function of the professional business in financial services and what securities does it include?
AKA the wholesale sector includes equity markets, derivatives and insurance markets. provides fund management, investment banking and custodian banking services.
what does the retail sector focus on, what services does it include?
services provided to personal customers, includes retail banking, insurance, investment services and financial planning and advice
who are the main customers for retail/ professional banking?
professional: asset managers, corporations, organisations, govts
retail: people and individuals
what are equity markets?
stock markets where the shares of companies such as amazon are traded e.g., NYSE, LSE, NASDAQ
what are equity markets being rivalled by and what are these?
they are becoming rivalled with MTFs (multilateral trading facilities) which bring together people who are interested in trading financial instruments including shares, bonds, derivatives then allowing them to trade on a single platform
what are bond markets?
markets that allow govts and companies to raise debt finance capital by selling their debt on to customers in exchange for debt securities (assets that entitle the owners to a stream of repayments over a set period of time with interest)
What are Foreign Exchange (FX) markets?
markets that facilitate the trading of currencies as well as the determination of exchange rates, it is the largest of all financial markets
what does over the counter (OTC) mean?
when brokers and dealers negotiate directly with one another rather than through a central clearing house (stock exchange e.g., NYSE, LSE) as is seen in equity markets
what is the derivatives market?
market that trades a range of complex products on underlying instruments inc. currencies, indices, interest rates, equities, commodities and credit risk. they are available on trading markets and OTC markets
what does the insurance market specialise in?
the management of risk
