Financial markets help to direct efficiently the flow of savings. It also directs investment flow in the economy. They do this in ways that facilitate the accumulation of capital. Furthermore, it facilitates the production not of goods but services as well. The combination of well-built financial markets and institutions suits the needs of lenders and borrowers and therefore the overall economy.

What are financial institutions and markets?

Financial markets, institutions and instruments provide opportunities for investors. With this, investors can specialize in particular services or markets diversify risks, or do both.

As compared to thinner markets with limited available securities, large financial markets provide more liquidity for market participants.