Investing in the International Financial Market - Bermuda Offshore Product and Legal Implications - Dissertation Example

There are different types of financial markets that are used for marketing internationally. These kinds of markets include capital markets, money markets, foreign exchange markets, and insurance markets. All these kinds of markets are used by the investors to enhance the growth of the economy among the nations involved. Each of them is explained below (McCormick, 2010). Capital MarketThe capital market is one aspect of the financial market. The capital market is a concept of marketing for assets, commodities, and securities which have a long maturity and which are not indefinite.

The maturity period of the capital markets is more than one year, thus it is a long-term investment. A capital market is an institutional arrangement to borrow and lend money for a longer period of time. The institutions which are concerned in the borrowing of the capital markets are corporations and business units which use different kinds of instruments to ensure that they carry out financial transactions. The capital market is a provision of long-term debts to the government and the public corporations, and thus the governments get finances from such markets (McCormick, 2010).

The capital markets are classified into two; the primary markets and the secondary markets. Primary markets are types of capital markets that deal with the marketing of shares that are new in the market while secondary markets are the trading and exchange of shares that exist in the market. The different kinds of capital markets include stocks markets and bond markets. The use of stock markets requires the traders to issue shares and involve themselves in trading the common stock so as to provide financing to the public.

The bonds market on the other hand is the situation in which the investors issue bonds in order to provide financing, and thus ensure that the bonds are traded (McCormick, 2010). Role of capital marketsThe capital markets play a significant role in the economy of the country. A capital market that is developed is usually changing and vibrant and can make the national economy grow and develop very fast. Therefore, there are different roles that the capital markets play in order to facilitate a fast-growing and developing economy.

One of the roles of the capital markets includes savings mobilization, whereby the people are mobilized to use funds for investment and thus ensure the economic growth of the nation through investment. The people are able to locate the idle funds in the economy, and thus can be able to use such resources for proper use through investment. The investment is long-term and thus the resources can be productive after a long period of time (Levich & Walter, 2004).Another significant role that the capital market plays is the formation of capital, whereby stock is added to that which exists in the economy.