{"id":43,"date":"2017-11-06T16:39:47","date_gmt":"2017-11-06T16:39:47","guid":{"rendered":"https:\/\/skyeconomynews.com\/?p=43"},"modified":"2017-12-15T16:02:00","modified_gmt":"2017-12-15T16:02:00","slug":"the-emergence-of-the-global-financial-markets","status":"publish","type":"post","link":"https:\/\/skyeconomynews.com\/the-emergence-of-the-global-financial-markets\/","title":{"rendered":"The Emergence of the Global Financial Markets"},"content":{"rendered":"

The world\u2019s financial markets date back to the 17th<\/sup> century, having emerged in the city of Amsterdam, Netherlands. However, they saw the most growth and development after the industrial revolution that led to the appearance of joint stock companies.<\/p>\n

The most famous markets in the economic history were in the cities of Venice and Genoa in Italy, as well as the Frankfurt market in Germany, which was traded mostly through bills of exchange and precious metals. These markets were associated with the Middle East, Far East and Europe, and appeared after the emergence of the industrial revolution and the development of economic thought, as well as an increased desire for individual investments. Thus, various companies appeared which allowed individuals to contribute to their ownership in order to ensure stability and growth.<\/p>\n

In this article, we are going to talk about what we consider to be the most important functions of the financial markets, which play a very big role in supporting the economy of the state.<\/p>\n

Directing savings to the benefit of the national economy<\/strong><\/p>\n

Small investors who cannot finance their projects usually buy as many securities as they can afford. This helps reduce inflation. The financial markets help to transfer funds from lenders to borrowers. Lenders are reducing their consumption in order to get higher incomes in the future, when they get the money back from the borrowers, plus a small fee. Borrowers use the funds daily to trade in the financial markets. All this assists in economy growth, and general well-being of a state.<\/p>\n

Contributing to the financing of development projects and plans<\/strong><\/p>\n

It is not uncommon to see large companies or even countries issuing bonds \u2013 practically borrowing money from the people in order to finance development projects. Usually the issuer of these bonds agrees to pay to the creditor a certain sum every year and is obligated to pay them interest. Issuing bonds helps the economy of a country by providing it with the financing it needs to sustain projects.<\/p>\n

Contributions to individuals and companies<\/strong><\/p>\n

Financial markets help traders gain wealth and increase their portfolios. The more people invest, the more capital the economy of a country has, which ultimately aids in economic growth. From a company\u2019s perspective, the financial markets are a very good indicator of the what public opinion on them is. The number of shares and their price is a good indicator on the performance of a company. Often times, a decline in the number of shares means that the company is on a down trend, and leads to a change in its policy in order to improve its financial position.<\/p>\n

There are many international markets out there, but what are the most performing ones? Here are some that we consider to be the most powerful, playing a major role in shaping the global economy:<\/strong><\/p>\n