Financial markets are the place that facilitates buying and selling of financial instruments, claims, or services. It caters to the credit needs the individuals, firms, and institutions.
Financial markets are critical for producing an efficient allocation of capital, allowing funds to move from people who lack abundant investment opportunities to people who have them.
The financial market deals with financial assets or instruments of different types, such as currency deposits, cheques, bills, bonds, etc. It consists of individual investors, financial institutions, and other intermediaries linked by formal trading rules and communication networks for trading the various financial assets and credit instruments.