Financial Markets Essay Example | Topics and Well Written Essays - 1000 words - 1

Financial Markets - Essay Example In the context of the International Community the most known financial regulators are the following ones: a) the International Organization of Securities Commissions – also known as IOSCO, b) the Basel Committee on Banking Supervision and c) the Committee of European Securities Regulators – for the supervision of Financial Services across Europe. It has to be noted that international regulators have no power to impose specific rules on countries internationally – or to ask the local authorities to take measures in order to support such activity (Backley, 2008, p.135) The term ‘denomination intermediation’ refers to the transformation of money by financial intermediaries – usually the banks (Jeucken, 2001, p.56); a clearer definition of the above term is provided by Neave (1998); in accordance with the above researcher, the term ‘denomination intermediation’ reflects the following activities of banks: a) the gathering of money through the accounts of individuals – the amount deposited in each account is usually small and b) the lending of this amount – money gathered; the amounts given as loans are usually high (Neave, 1998, p.260). Towards the same direction, Brigham (2008) notes that ‘denomination intermediation’ is a term reflecting ‘the process by which financial intermediaries transform funds provided by savers into funds used by borrowers’ (Brigham, 2008, p.101). Liquidity risk is related with insolvency at the following point: in cases of high liquidity, the risk of insolvency is decreased; on the other hand, in low liquidity, the risk of insolvency is increased; it is in this context that the above two risks have been characterized as ‘linearly coupled processes’ (Matz et al., 2007, p.174). At the next level, liquidity can have a series of different aspects – including ‘the