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Rock Street, San Francisco

Financial markets mainly exist to bring together two groups of people this includes investors (lenders) and borrowers (governments and companies seeking to borrow money). In addition to that, financial markets permit lenders and borrowers to take part in the purchase and sales of stock also known as ‘shares’. Nevertheless, banks also form part of financial markets and main objective is primarily to make a profit from borrowers and investors.  In today’s world, Financial markets are vital since assist a country with its economic growth and more importantly it helps a country to maintain a strong economy in the long run by allocating and providing finance where it is needed. More broadly, financial markets (banks) are the main financial providers of funding to companies, government, hospitals and schools. For instance, banks provide different types of mortgages to companies that need help with their growth or expansion. Banks also offer mortgages to individuals including families or partners who want to buy a new house or keep their money in a safe place and then charge them a interest rate to make profit from it.  In addition to this, markets do not solely assist with companies’ growth, but also is the main font of funding for schools and hospitals. It provides benefits such as free travelcards and free meals to children and ensures children receive and have the equipment required to produce an excellent performance at school. Nevertheless, Financial markets plays a huge role in the government, since it allows the government to provide various benefits to single mothers, elderly people and people with disabilities. As it is evidence, financial markets are seemed as ‘big drivers of prosperity’ by companies and people.  However, financial markets can have a negative impact on the economic activities of a country, if it is not regulated correctly. For instance, in 2007 and 2008 the economy of the USA collapsed dramatically leaving hundreds of people in the street and with no jobs. This crisis did not solely affect the USA, but it spread globally affecting Japan, India, and particularly European countries including the United Kingdom.  At the present time, if financial markets are not regulated appropriately, this will indeed impact the economic activities of the UK. For instance, it will lead the country to a fatal recession which will produce a higher unemployment rate as a consequence of that companies will experience a lower profitability that may lead them to shut down their businesses since people will become more conscious about how much money they are spending. Ultimately, by not regulating the financial markets correctly, borrowers and lenders needs will not be met and therefore the economy of the country as a whole.  In conclusion, as it is evident, financial markets do play an immense role in the economic activities of the United Kingdom and it plays in other countries around the world. If a country does not regulate financial markets efficiently, funding will not be allocating where it is needed and therefore it will cause a financial crisis like it occurred in the 2008-2009. This consequently will not solely affect companies and people, but the entire economy of the country as a whole and therefore lead the country to recession

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