Business Financing and the Capital Structure Essay

The financial marketplace is the ara where companies engaged in financial trading are up to(p) to get uppercase to run. The financial market can also be referred to as capital markets. Stock markets are the place where companies come to disdain among themselves they represent individual investors or corporate investors. Trade in railway lines has been deemed among the closely mercenary areas a person can trade in the returns are good. Stocks can simply be defined as shares bought for trading findings and wage gained are ploughed back into the U.S. economy. (Saccomani and Chambers, 2008)Trade in U.S. financial markets run various benefits an organization can get loans to fund their activities through with(predicate) rudderless of bonds. When organizations are able to run efficiently then everybody gets to benefit, the government benefits through increased tax collection and more people get employed.The stock market offer individuals an avenue to put their money in lucrat ive stock instruments where the funds are managed by financial experts. Individuals do non curb to worry about their limited financial expertise because at the stock markets well informed brokers or their employees will help them. Individuals are offered a variety of trading avenues which involves minimal labor and less capital intensive. (Saccomani and Chambers, 2008)The Federal Reserve is a name that is used to define the telephone exchange Bank in America. The bank was a creation of U.S. Congress for purpose of offering a safer and easier trading environment in America. The Fed is tasked with the counsel of the American mo utmostary policy. They also regulate banks as well as monitoring risks at the stock markets. The Fed is comprised of seven members who constitute the climb on of governors. Members of the board also constitute the F.O.M.C. (Federal Open Markets Committee) this mission decides on what pursuance evaluate to be aerated by banks as well as purchase of treas uries. The Feds primary role is that of regulation. (Ltaifa et al, 2009)The Fed chairwomans role is that of a supervisor he is tasked with the role of pitch the board to consensus of various monetary issues. The chairman is a presidential appointment hence he reports to the president from time to time on the plains financial matters. The chairman also has the responsibility of steering the committee on concern rates. (Ltaifa et al, 2009)Departments or components of the Fed Reserve need to bid their respective roles effectively so as to take the country in to financial success. The chairman should always maintain a steady cover of all fiscal policies. The board should non enact self-centered policies that whitethorn endanger the banking sector or stock markets. The board and the chairman have to make prudent assessments of U.S. financial performance before taking either steps meant at changing any monetary policy.Interest rates affect the economy particularly the spending powe r of individuals. The rates charged on bank loans lays a heavy burden on citizens the net effect is loans become expensive hence doing business becomes harder. Higher interest rates on returns at the stock markets offer a turn effect to the citizen this brings about more disposable income because the return on investiture is higher. (Batten and Szilagvi, 2011)The world suffers when markets get affected by whatever elements this happens because the various economies approximately the world are interconnected hence any financial nightfall of one will weaken the other. The Euro zone crisis is one such slip where a problem begins in one country but later on sometime affects a number of countries within same geographical pickle countries that trade together. In the U.S. such a crisis occurred between 2007-2010, individuals found themselves not being able to finance their loans and other credit obligations.Care and sharpness is needed when one wishes to traverse this terrain.Refer encesSaccomanni, F., & Chambers, A. (2008).Managing international financial instability subject tamers versus global tigers. Cheltenham Edward Elgar.Ltaifa, Navil Ben, Kaendera, Stella, & Dixit, S. V. S. (2009).Impact of the Global Financial Crisis on Exchange order and Policies in Sub-saharan Africa. Intl Monetary Fund. Batten, J., & Szilagyi, P. G. (2011).The impact of the global financial crisis on emerging financial markets. Bingley, U.K Emerald.Source document