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Monday, 31 December 2018

Relation to the modern financial system

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Relation to the modern financial system
Relation to the modern financial system

The financial system in the most western country has been undergone a remarkable transformation. One of the featureof this development is disinter mediation. A portion the fund involved in saving and financing, flow directly to the financial market instead of being rout via the traditional bank lending and deposit operation. The general public interest in investing in the stock market, either directly or though mutual funds, has been an important component of this process.Statistics show that in recent decades share have made up an increasingly large proportion of household financial assets in many countries.In the 1970 s, Sweden deposit accounts and other very liquid assets with little riskmade up almost 60 percent of household financial wealth, compared to less than 20 percent in the 2000. The major part of this adjustment is that  financial portfolios have gone directly to share but a good deal now take in the various kind of institutional investment for group of individual e.g pension fund, mutual fund, hedge fund, insurance investment of premium etc. A stock market, "he answered promptly, A stock market is crucial to the existence of capitalism and private property. For it mean that there is a function market in the exchange of private title to the mean of production. There can be no genuine private ownership of capital without a stock market there can be no true socialism if such a market is allow to exist.

The trend toward forms of saving with a high risk has been accentuated by new rule for most fund and insurance, permitting a higher proportion of share to bond. Similar tendencies are to be found in other developed country. In all developed economic system, such as the European Union, the United states, Japan and other developed nation, the trend has been the same, saving has moved away from traditional "bank deposit to more risky security of one sort or another". A second transformation is the move to electronic trading to replace human trading of list security.
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