Money capital - funds that can act as a factor of production and funds for profit. Domestic entrepreneurs often find themselves in a situation of feeling a lack of capital.
This fact may serve as an obstacle to their effective activity and further development. At the same time, other participants in certain economic relations have temporarily free monetary resources in the form of savings. The owners of such funds have the opportunity for a certain time to transfer them to another participant in economic relations. The second side can profit from them, using it as an investment. However, for some period it does not have liquidity of monetary resources for their expected growth in the near future. This is precisely how the capital market appeared, the instrument of which is cash issued to business entities for a certain period for a fee and subject to repayment. Moreover, the organization that provides its funds as a loan, receives some income in the form of interest for their use by the borrower.
The world capital market has two types of structure: operational and institutional.
Moreover, the second structure is the most common and includes official institutions (Central Bank of the Russian Federation, international financial and credit organizations), private financial institutions (commercial banks, pension funds and insurance companies), as well as other companies and exchanges. The leading role in this group of organizations is assigned to transnational banks and corporations.
The international capital market, depending on the timing of its movement, consists of three sectors: the Eurocredit market, the global money market and the financial market. So, the global market for cash resources is based on the provision of European loans for a short time (up to one year). The capital market for a longer time undergoes certain changes in terms of increasing the volume of operations on it since the 70s of the twentieth century. This is due to technological progress.
This capital market is often called the field of consortium or syndicated loans, since it is precisely these financial relations that represent banking consortia or syndicates.
The global capital market is based on the provision of bonded loans, and the beginning of its formation falls on the 60s of the twentieth century. It was with its appearance that the traditional market for foreign loans and the Euroloan market began to function in parallel. Already in the early 90s it was on euro loans that began to account for about 80% of all international borrowed resources. The indicated money capital market has a main feature - both foreigners are used for loans by lenders and borrowers. Another difference in this sphere of financial relations is the issue by non-residents of traditional foreign loans within the same country, and the placement of Euroloans is carried out on the markets of several states at once.
