The structure of the stock market
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Banks and their place in the structure of the stock market
Bank - a financial institution that accumulates temporarily free funds in deposits and offers them for temporary use in the form of loans or credit loans. In addition, banks acting as intermediaries in the mutual payments and settlements between enterprises, institutions and individuals.
Historians are still arguing about when there were the first banks. Someone thinks that they have been the prototype of loan funds of medieval Europe, while others claim that the banks were the progenitors of exchange offices of ancient Egypt. Anyway, there is every reason to believe that the banks appeared almost simultaneously with the money, so it is not the gift of banker profession many call the "second oldest".
Long ago, people realized that simply accumulate huge sums of wealth is unreasonable, it is much more profitable to give them a temporary use, either to open independent commercial enterprises. Already in ancient Babylon and Greece practiced accepting deposits and paying interest on it. However, credit operations have evolved gradually and settlement service depositors. Calculations were performed using the transfer records of cash from one table to another. Actually the word bank from Italian "banco" means "table". These banks tables were installed on the premises, which hosted a lively trade in goods, and engaged in currency exchange and a small monetary transactions. Convenience can not be created by banks to attract the attention of business people and gradually expanded banking clients, the banks, in turn, passed on the performance of principals work on drawing up contracts between clients and began to act as intermediaries in commercial transactions. Until the 19th century produced even bank notes, which are treated on a par with full-fledged money, but these bills were deprived of the capacity for treatment in case of bankruptcy of the issuers, so commercial banks were forbidden to issue banknotes. Thus, a modern two-tier banking system consisting of numerous commercial banks and one of the central bank of issue.
Long gone are the days when banks offered high interest rates on deposits. Although today your contributions is protected, yet the current bank interest rates below the level of inflation. Accordingly, the deposit not only grow your capital, but did not protect him from depreciation. Well, the bank's functions that are far from exhausted. The bank may offer you credit at appropriate conditions, the possibility of collective investment and a number of other instruments, and even if you have decided to work independently on the stock market, through a broker you choose, all the same, all transactions will take place through the bank and other ways the stock market simply does not exist.
The structure of the stock market brokers
Stockbroker - financial intermediary engaged in the purchase and sale of securities for the account and on behalf of a client. The broker must be officially registered by the exchange. According to the law, in the process he does not become the owner of the securities and is not responsible for the execution of the transaction. Occupation broker came later than the exchanges began their work. Initially, merchants preferred to do to find buyers of their products, but it gradually became clear that can not do without professional intermediaries.
There was probably more exciting spectacle than the classic floor trading on the stock exchange, the screams, the fuss raised by hand, scattering in different directions paper, just some shamanic ritual performed quite civilized. But this is only the outer side of the broker, followed by a clear system, which included not only the specific jargon, and even specially invented sign language. However, this exotic is now almost can not be found. Brokers have replaced the noisy rooms on the quiet rooms and pencils and paper to keyboard and computer screens, but in fact, little has changed. Central to any broker is customer trust, bug involuntary or unintentional can dramatically affect the image and the investor simply go to another broker. Of course, e-commerce significantly reduces the room for maneuver to those people whose intentions are not very clean, but new technologies give rise to new risks, so no matter how to manage your money, using paper, by phone, or running through the wires of the electron momentum, they still remain money.
Naturally error when trading in the stock market, no one is immune. No the most perfect system does not give a full guarantee. So one simple fatigue stockbroker almost led to shock the American securities market.
In October 2002, the American investment company had nearly lost several billion dollars because of an error an ordinary employee. At the end of the day, he mistook the number of applications of zeros and put up for sale shares worth 4 billion dollars instead of lowered him from the top figures in the 4 000 000, although the staff of the New York Stock Exchange managed to avoid disaster and most of the transactions canceled before they have been definitively confirmed. investment company said that this error did not affect the company's financial position and does not cost them dearly, however, the unauthorized sale of shares to 622 million, which is 100 times longer than planned has been carried out.
The constant psychological stress caused by the need to justify the trust of customers, the massive amounts of diverse information, which should not only view, but also to rethink all this every day, every hour, without holidays and weekends. Not for nothing they say that the broker - is not a profession, a broker - is a diagnosis.
Under the concept of the stock market means the combination of mechanisms and actions that are intended to trade in securities (such as stocks, bonds, etc.). The stock market is an integral part of the capital market…