financial markets

Actual events in would of high finance in mid-September 1992 resembled a thriller novel.Confusion seemed to dominate international financial markets. The British pound and the Italian lira sank in foreign-exchange markets,while the U.S. dollar and German mark rose. Stock prices fluctuated around the would,and interest rates on bonds rose and fell as traders,bankers,and finance ministers tried to maintain stability.Also,the 1980s and early 1990s were volatile times in financial markets in the United States. Interest rates on bonds,stock price,and the value of the U.S. dollar relative to other currencies fluctuated significantly.To understand the roller coaster behavior of domestic and global financial markets,you need to understand the role that financial markets play in the economy and what movements in financial markets tell savers and borrowers.
Financial markets such as the stock or bond markets are one way in which savers surpluses are transferred to borrowers. Moreover,financial markets extend beyond any single country,s borders. Indeed,the international capital markets,that is,the market for lending and borrowing across national boundaries, grew rapidly during the past twenty years. In addition to helping businesses and governments around the world raise fund,financial markets communicate important information through the prices of financial assets.