Role of financial markets:
       A general overview of functions and benefits
       Sonja Juko, Senior Advisor for MonetaryPolicy and Financial Markets, Center for International Central Bank Dialogue
  Disclaimer: Views expressedare those of the author and do not necessarily representthe views of Deutsche Bundesbank
    Objective
    I Start discussion on financial markets by highlighting the broader context
    I Brainstormon motivationbehindfinancialmarketdevelopment
    I Review generalfunctionof financialmarketsasan elementofthefinancial
     system
    I Review functionofspecificfinancialmarketsegments
    Role of financial markets - An overview of functions and benefits
    Deutsche Bundesbank                                 2
      Context of discussion
      Financial System:  Basic structure
      I Financial markets (and their
       development) needtobeseenin the
       broadercontextofthefinancialsystem              Intermediaries
      I A financial system consists of
       −Money (meansofpayment)                      FA/FL  FA/FL   FA/FL
       −Financial instruments                        Financial System
       −Financial markets                           FA/FL          FA/FL
       −Financial institutions                             FA/FL
       −Financial infrastructure (payment systems)
                                                          Markets
                                                      Payment system
      Role of financial markets - An overview of functions and benefits
      Deutsche Bundesbank                                                      3
     Questions
     (1) Why is it desirable to develop (national) financial markets? What are benefits
        of (developed) financial markets?
     (2) Whatgeneralfunctionsdo financialmarketsserve? 
     (3) Why is it desirable to have/develop various financial market segments? How
        do thefunctionsoffinancialmarketsegmentsdiffer? Whichfinancialmarket
        segmentscaterfor whatneeds?
     (4) Whatcharacterizes(efficient)functioningfinancialmarkets?
     Role of financial markets - An overview of functions and benefits
     Deutsche Bundesbank                                                4