Let us understand the financial structure, markets, systems, and institutions.

Below are definitions of some of the important financial terms-

Formal system — An organized system that is highly regulated by the Government

Informal system — Informal system is unorganized, with no Government involvement at all.

Financial Institutions — They help in mobilizing savings and ensuring proper allocation of funds. Financial Institutions comprised Banking Institutions & Nonbanking Institutions.

Financial Instruments — They are instruments that can be transacted in financial markets like equity, debentures, etc.

Capital Market — It is a long-term market for financial assets.

Money Market — It is short term market for financial assets.

Primary Market — It is a part of the Capital market where new securities are listed.

Secondary Market — It is a part of the Capital market where listed securities are traded.

To know the differences and more details about Financial Markets, Financial Institutions, Capital & Money Market, Primary & Secondary Market, Financial Instruments pls follow the below link

Financial Markets and Institutions with comparisons — FinMargin

This post originally appeared on the Finmargin website at https://www.finmargin.com/