INTERNATIONAL FINANCIAL

MARKETS
We broadly classify the international financial markets into
the following :

1. Foreign 2. 3.
Exchange International International
Market money Market Credit market

4. 5.
International International
Bond Market Stock Market

FOREIGN EXCHANGE MARKETS

The Foreign Exchange Market is a market where the buyers and sellers are
involved in the sale and purchase of foreign currencies. In other words, a market
where the currencies of different countries are bought and sold is called a foreign
exchange market.
The structure of the foreign exchange market constitutes central banks,
commercial banks, brokers, exporters and importers, immigrants, investors,
tourists. (ALREADY PROVIDED THIS TOPIC IN DETAIL)
INTERNATIONAL MONEY MARKET
The international money market is a market where international currency
transactions between numerous central banks of countries are carried on. The
transactions are mainly carried out using gold or in US dollar as a base. The basic
operations of the international money market include the money borrowed or
lent by the governments or the large financial institutions.
The international money market is governed by the transnational monetary
transaction policies of various nations’ currencies. The international money
market’s major responsibility is to handle the currency trading between the
countries. This process of trading a country’s currency with another one is also
known as forex trading.
Unlike share markets, the international money market sees very large funds
transfer. The players of the market are not individuals; they are very big financial
institutions. The international money market investments are less risky and
consequently, the returns obtained from the investments are less too. The best
and most popular investment method in the international money market is via
money market mutual funds or treasury bills

INTERNATIONAL CREDIT MARKET

A marketplace for the exchange of debt securities and short-term commercial
paper. Companies and the government are able to raise funds by allowing
investors to purchase these debt securities. Activity in credit markets is often used
to gauge investor sentiment. If more bonds from the government are being
purchased, this is typically a good indicator that investors are worried about the
stock market.
The credit market dwarfs the equity market in terms of dollar value. As such, the
state of the credit market acts as an indicator of the relative health of the markets
and economy as a whole. Some analysts refer to the credit market as the canary
in the mine, because the credit market typically shows signs of distress before the
equity market.
When corporations, national governments, and municipalities need to earn
money, they issue bonds. Investors who buy the bonds essentially loan the issuer
money. In turn, the issuer pays the investors interest on the bonds, and when the
bonds mature, the investors sell them back to the issuers at face value. However,
investors may also sell their bonds to other investors for more or less than their
face values prior to maturity.

INTERNATIONAL BOND MARKET

The bond market is a financial market where participants buy and sell debt
securities, usually in the form of bonds. A bond issued in a country or currency
other than that of the investor or broker.
Unlike Equity and Money markets, there is no specific bond market to trade
bonds. However, there are domestic and foreign participants who sell and buy
bonds in various bond markets.
A bond market is much larger than equity markets, and the investments are huge
too. However, bonds pay on maturity and they are traded for short-time before
maturity in the markets.Bonds also have risks, returns, indices, and volatility
factors like equity and money markets.

INTERNATIONAL STOCK MARKET

The stock market refers to the collection of markets and exchanges where regular
activities of buying, selling, and issuance of shares of publicly-held companies take
place. Such financial activities are conducted through institutionalized formal
exchanges or over-the-counter (OTC) marketplaces which operate under a
defined set of regulations. There can be multiple stock trading venues in a country
or a region which allow transactions in stocks and other forms of securities.
While both terms - stock market and stock exchange - are used interchangeably,
the latter term is generally a subset of the former. If one says that she trades in
the stock market, it means that she buys and sells shares/equities on one (or
more) of the stock exchange(s) that are part of the overall stock market. The
leading stock exchanges in the U.S. include the New York Stock Exchange (NYSE),
Nasdaq, and the Chicago Board Options Exchange (CBOE). These leading national
exchanges, along with several other exchanges operating in the country, form the
stock market of the U.S.