The financial markets are places where financial securities and derivatives are traded. This means that, generally, through the trading of assets like securities, money flows where it’s needed, creating liquidity for individuals, businesses, and organisations.
There are three International Financial Centres designated located around the world: one each in Tokyo, London, and New York. These are designated by the International Monetary Fund.
Financial markets can also be categorised further based on the type of assets traded. These categories include Forex, the Equities market (also known as the stock market), Exchange Traded Fund (ETF) market, commodities market, money market, fixed income market, and emerging market.
These markets operate through what are known as exchanges, which acts as a platform that facilitates trades and disseminates price information. One of the most well-known exchanges is the New York Stock Exchange (NYSE).