Money market

Concept of Money Market and Capital Market

The financial system is an important element of an economy. The financial resources are exchanged through the financial system. The financial market is the heart of the financial system. The financial market refers to a place or mechanism through which financial instruments are traded.

 

According to S.K. Cooper and other “Financial markets are the markets in which financial instruments are traded“.

 

Similarly, according to Dudley G. Luckett, “Financial market is to be understood as any exchange of a variety of financial instruments“.

 

The financial market is said to the ‘brain’ of entire economic system. The savings are

channelled to investments through financial market. The financial instruments like stock, bond, insurance policy, government securities and debentures are traded in the financial market.

 

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