Financial markets are the plumbing of the global economy — they connect people who have money with people who need it. Savers invest in stocks and bonds; companies and governments use that capital to grow and build infrastructure. Without financial markets, economic growth would be a fraction of what it is today.
Major types: capital markets (stocks and bonds — long-term funding), money markets (short-term lending), forex markets (currency exchange), derivatives markets (futures, options), and commodity markets (gold, oil, agricultural products). Combined, these markets move trillions of dollars daily and set prices for everything from gasoline to mortgages.
Financial markets require trust, transparency, and regulation to function. Regulators like the SEC (US), SEBI (India), and FCA (UK) enforce rules to prevent fraud and manipulation. The 2008 crisis showed what happens when regulation fails — toxic mortgage products spread through interconnected markets and nearly collapsed the global financial system.