What is the difference between financial markets and capital markets

Generally speaking, a financial market is a market for financial intermediary. It includes the money market, the capital market, the foreign exchange market, and sometimes the ** market.

Funds with a loan period of 1 year or less are called money market loans

market)。It mainly includes: interbank lending market, repurchase agreement market, bill market, large negotiable certificate of deposit market, short-term bond market, etc.

The capital market, also known as the long-term capital market, is a place to buy and sell medium and long-term credit instruments and achieve long-term financial integration. A major part of the financial market, which generally refers to the market where the loan period is longer than 1 year. It can be subdivided into **market, bond market, **market, financial derivatives market, etc.

The foreign exchange market refers to a trading place engaged in foreign exchange trading, or a place where various currencies are exchanged with each other.

The insurance market also falls under the umbrella of financial markets.

In short, the market that operates on currency can be classified as a financial market.

The internationally accepted theory is to divide the financial market into money market and capital market according to the agreed period of financial instruments. The money market is a financial market that operates monetary financing within one year, and the capital market is a financial market that operates medium and long-term capital lending and business for more than one year.

The financial system refers to an administrative affair.

Conceptual distinction between capital markets and financial markets:

1. The money market is mainly a market with a loan period of 1 year or less. It mainly includes: interbank lending, repurchase agreements, bill market, large negotiable certificate of deposit market and short-term ** bond market.

2. The capital market, also known as the long-term capital market, is a place to buy and sell medium and long-term credit instruments and achieve long-term financial integration, and generally refers to the market with a capital loan period of longer than one year. It can be subdivided into **market, bond market, **market, financial derivatives market, etc.

3. As the name suggests, the financial market is a financial market. It includes the currency, capital, and foreign exchange markets, and sometimes the yellow market, as well as the insurance market, among others. In short, the market that operates on money can be classified as a financial market.

The foreign exchange market refers to a trading place engaged in foreign exchange trading, or a place where various currencies are exchanged with each other.

Extended Materials. Financial market analysis.

The primary market is not well known to the general public because the process of selling ** to the initial purchaser is not carried out publicly. An investment bank is an important financial institution in the primary market to facilitate first-time sales. The practice of investment banks is underwriting, i.e. they ensure that the company can be sold according to a certain ** and then market it to the public.

The primary market refers to the primary market, that is, the issuance market, in which investors can subscribe for the company's issuance. Through the primary market, the issuer raised the funds needed by the company, and the investors purchased the company's ** and became shareholders of the company, realizing the process of converting savings into capital.

In Western countries, the primary market is also known as the issuance market, primary financial market or primary financial market. In the primary market, demanders can obtain funds through the issuance of ** and bonds. In the process of issuance, the issuer generally does not directly trade with the purchaser of the currency, and needs to have an intermediary agency, that is, a broker.

Therefore, the primary market is the best broker market.

Main functions: to provide a channel for those who need funds to raise funds; Provide investment opportunities for capital users to realize the transformation of savings into investment; Form a revenue-oriented mechanism for capital flow to promote the continuous optimization of resource allocation.

The capital market refers to the financial market of financing and operation for more than one year of medium and long-term capital loans, including the first market, the bond market, the first market and the medium and long-term credit market, etc., and the financing funds are mainly used as capital to expand reproduction, so it is called the capital market.

As an important part of the capital market, the market has a huge ability to absorb medium and long-term funds in the form of issuance of bonds and bonds, and the public issuance of bonds and bonds can also be freely bought and sold and circulated in the secondary market, with strong flexibility.

The money market is a financial market that operates for short-term financing within one year, including the interbank lending market, the bill discount market, the repo market and the short-term credit market.

Both the capital market and the money market are places where the supply and demand of funds are traded, and they are the places where funds are gathered and distributed in the economic system"reservoirs"with"Triage station".But there is a clear division of labor between the two. Demanders of funds raise long-term funds through the capital market and short-term funds through the money market, and the national economic sector uses these two markets to broaden financial and economic activities.

Historically, the money market preceded the capital market, which is the foundation of the capital market. But the risks in the capital markets are much greater than in the money markets. The main reason is that in the medium and long term, the uncertainty affecting the use of funds increases, the uncertainties increase, and there are many factors affecting the level of the capital market.

The capital market and the money market are collectively referred to as financial marketsIt is an important part of China's socialist market economy, which has been highly valued by the world, and has developed rapidly, and has begun to take shape. Practice since the beginning of reform and opening up has proved that the establishment and development of the financial market is of great significance to optimizing the allocation of resources, invigorating financial integration, improving the efficiency of the use of funds, raising construction funds, and establishing a modern enterprise system.

The money market is a short-term capital market with low risk, low return, short maturity and high liquidity;

The capital market, also known as the long-term financial market, has high risks, high returns, long maturities, and weak liquidity.

1. Different terms: The capital market usually refers to the market for medium and long-term (more than one year) capital (or asset) lending and financing activities, while the money market is less than one year.

2. Different risks: due to the long term, the capital market is more uncertain, so the risk is higher, for example, it is a capital market tool, and the risk is very high; The money market is less risky.

3. The composition is different: the capital market in a broad sense includes two parts: one is the medium and long-term deposit and loan market of banks, and the other is the market with high prices, including the bond market and the market; A capital market in the narrow sense?

It refers to the market for the issuance and circulation of **, bonds, etc., collectively referred to as the **market. What about the money market? It should be composed of sub-markets such as interbank lending, commercial paper, treasury bills and repurchase agreements.

Extended Information: Characteristics of Capital Markets.

Compared with the money market, the main characteristics of the capital market are:

1.Long financing term.

At least more than 1 year, it can be up to several decades, or even no expiration date. For example, medium and long-term bonds have a maturity of more than 1 year; **No expiration date, no expiration date, permanent**; The duration of closed** is generally 15-30 years.

2.Liquidity is relatively poor.

Most of the funds raised in the capital market are used to meet medium and long-term financing needs, so the liquidity and liquidity are relatively weak.

3.The risk is high and the return is high.

Due to the long financing period and the high possibility of major changes, the market is prone to volatility, and investors need to bear greater risks. At the same time, as a reward for risk, the return is also higher.

In the capital market, the main funds are savings banks, insurance companies, trust and investment companies and various individual investors; The capital demand side is mainly enterprises, social groups, ** institutions, etc. Its trading objects are mainly medium and long-term credit instruments, such as **, bonds and so on. The capital market mainly includes the medium and long-term credit market and the ** market.

4. Large amount of capital borrowing.

5. **Large range of changes.

Many people, including professionals, do not understand the difference between financial markets and capital markets. As I mentioned in the first issue, the financial market is the market where all financial products are traded, and the financial market or financial system is the largest area in this field. In contrast, the capital market is only one part of the financial market, specifically, just the long-term capital market.

Nonetheless, capital markets play a key role in the overall financial markets. In this crisis, the irrationality of capital institutions is one of the important reasons for the collapse of investment banks.

In the economic sense, capital refers to the basic factors of production used for production, that is, material resources such as capital, plant, equipment, and materials. These resources are different from currencies and take a certain amount of time to realize, so the capital market refers to the market for medium and long-term capital lending and financing activities. The medium- and long-term trading period mentioned here is at least one year or more, and some transactions are as long as several decades, or even indefinite.

For example, the duration of closed ** is generally 15 to 30 years.

The sub-markets of the capital market are the market of value, including the bond market and the market. Transactions such as trading, buying and selling, and trading are all transactions in the capital market. Compared with the money market, transactions in the capital market have the characteristics of long financing period, relatively poor liquidity, and high risk, but once they make a profit in the capital market, the benefits are very considerable.

Financial capital refers to the capital that is integrated into monopoly banking capital and industrial capital, through financial linkages, capital participation and personnel participation. Finance capital is in capitalism.

A form of capital that gradually took shape during the transition to the imperialist stage. As industrial capital continues to concentrate and move towards monopoly, banks are also constantly concentrating capital and moving towards monopoly.

Financial capital refers to the highest form of monopoly capital formed by the mutual penetration and integration of bank capital and industrial capital. Financial capital replaces industrial capital as the dominant position. The concentration and monopoly of production and capital are the basis of all these changes.

Without a high concentration of industrial capital, it will be impossible to provide banks with a large amount of monetary capital**, and there will be no high concentration and monopoly of bank capital. The concentration and monopoly of bank capital, in turn, promotes the further concentration and monopoly of industrial capital through various credit means. Therefore, from the very beginning, the concentration and monopoly of industrial capital were intertwined with the concentration and monopoly of bank capital.

Financial capital is the monopoly capital formed by the combination of industrial monopoly capital and bank monopoly capital. Pathways include financial linkages, capital involvement, and personnel involvement.