Components of Financial Markets

The present book entitled ¿Components of Financial Markets¿ is a compilation of literature related to financial markets. In essence, the major purpose of financial markets is to transfer funds from lenders to borrowers. Financial market participants commonly distinguish between the capital markets" and the "money market," with the latter term generally referring to borrowing and lending for periods of a year or less. The need for a money market arises because receipts of economic units do not coincide with their expenditures. Thus, money market instruments are generally characterized by a high degree of safety. Maturities range from one day to one year; the most common are three months or less. Active secondary markets for most of the instruments allow them to be sold prior to maturity. Unlike organized securities or commodities exchanges, the money market has no specific location. In Central Africa, it is centered in Douala, at the Douala Stock Exchange, but since it is primarily a telephone market it is supposed to be easily accessible from all parts of the sub region as well as from foreign international financial centers.