The document provides an introduction to financial systems and markets. It defines a financial system as consisting of institutions, instruments, and markets that foster saving and channel funds to their most efficient use. Financial markets and institutions both play important roles in creating a balanced financial system and driving economic growth. The document outlines the key components and functions of money markets and capital markets, including primary and secondary markets. It notes that securities and exchange boards regulate capital markets and intermediaries to protect investors and ensure orderly development.

1. Introduction to Financial System By Dr. Gurendra Nath Bhardwaj Associate Professor IILM, Graduate School of Management, Greater Noida. Email: [email_address]

2. Issues for discussion Difference between Money Market & Capital Market Effect of Monetary Policy on Money Market Legal aspects of Money & Capital Market

3. Agenda An attempt to get answers of- What are the various components of a Financial System? What are contemporary issues of Financial System?

4. A financial System may be defined as a set of- Institutions Instruments & Markets Which foster saving & channels them to their most efficient use.

5. Well developed financial markets are required for creating a balanced financial system in which both financial markets and other financial institutions play important role. Markets, Institutions & instruments are the prime movers of economic growth -Prof. Olsons

6. A financial market consists of investors or buyers, sellers, dealers and brokers and does not refer to a physical location. The participants in the market are linked by formal trading rules and communication networks for originating and trading financial securities.

7. Functions of Financial Market Facilitate transfer of funds from surplus sector (Lenders) to deficit sectors (borrowers). Make market operations be free, fair, competitive and transparent.

8. Important functions of financial markets are- Price discovery process, which results from the inter-action of buyers & sellers in the market when they trade assets. Provision of liquidity by providing a mechanism for an investor to sell financial assets. Low cost transactions & informations.

9. Types of markets Money Market Capital Market

10. Capital Market Capital market consists of - Primary Market Secondary Market

11. Primary Market It deals with the issue of new instruments by the corporate sector. The major player in the primary markets are the merchant/ Investment banker, mutual funds, financial institutions, foreign institutional investors and individual investors.

12. Secondary Market It provides continuous market for the securities already issued to be bought & sold in volume with little variation in the current market prices. The players in the secondary market are the brokers, the mutual funds, financial institutions, foreign institutional investors and individual investors.

13. With a view to protect investor's interest and orderly development of capital market, Securities & Exchange Board (SEBI), regulates the capital market and intermediaries.

14. Thanks