The Stock Market and the Economy

The Stock Market and the Economy

Various financial institutions and markets operate in the contemporary corporate world. Examples include brokerage firms, commercial banks, mortgage companies, and insurance companies. Notably, this paper discusses the specialization of the four institutions and their influence on the U.S.. and global economies.

Mortgage companies

These institutions play a role as middlemen in buying and selling personal properties. They raise their profits from successful transactions between two firms. Also, gains occur in loan servicing, mortgage-backed securities (MBS), closing costs, discount points, and yield premiums.

Brokerage firms

Brokerage firms specialize in taking advantage of the best trading conditions by using the leading platforms and brokers. Further, the firms invest using a top broker and take advantage of the best liquidity and lowest fees. Also, the firms specialize in playing the role of a middleman who connects sellers and buyers to facilitate the transaction between them. Do you need help with your assignment ? Contact us at eminencepapers.com.

Insurance companies

Insurance companies specialize in various activities, including covering for protection of assets, life, and much more for organizations and individuals. Their profits are raised by charging premiums for the covers offered. Insurance companies make significant money pools which they use in other investment opportunities.

Commercial banks

Commercial banks seek profits from banking activities. They handle operations related to the deposit and withdrawal of money for institutions and individuals. Notably, they generate their profits by charging interest on loans offered. Also, they charge transaction fees for various money transactions that they handle.

Influence on the U.S. and Global Economies

All four identified institutions influence the U.S….. and global economies in various ways. Both mortgage and brokerage firms have the same effect on the subject economies. They both play an intermediary role whereby they charge a fee for facilitating different transactions between parties. The facilitated transactions directly impact both the U.S….. and the global economies because parties to the transaction can come from within the United States or across the globe (Ruiz, 2018). For example, a transaction between a party from the U.S.. and another from a foreign country will influence both subject economies. There would be an increase in revenue for either of the economies considering the paid party. However, the institutions can have a negative influence on the U.S.. economy. Suppose they constantly facilitate transactions that present gains to a foreign country and a loss to the party in the U.S., considering the same in the global economy. In that case, there will be no adverse effect because both transaction parties belong to the same global economy, thus contributing to its growth.

According to Sobiech (2019), insurance companies ensure economies remain vibrant and strong in different ways. It is important to note that insurance companies contribute immensely to employment growth. Insurance companies pool funds and use them to invest in various projects, and in the course, they create many employment opportunities. Notably, increased employment leads to increased income both in the U.S.. and global economies and stimulates their growth. Lastly, commercial banks assist in promoting the U.S.. and global economies in different ways. For instance, they offer loans and interest on deposits to people, which are utilized in various activities of economic importance. Also, like insurance companies, commercial banks engage in different investment activities that stimulate economic growth both in the U.S. and globally by creating employment opportunities.

References

Ruiz, J. L. (2018). Financial development, institutional investors, and economic growth. International Review of Economics & Finance, 54, 218-224.

Sobiech, I. (2019). Remittances, finance, and growth: Does financial development foster the impact of remittances on economic growth? World Development, 113, 44-59.

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The Stock Market and the Economy

Research how financial markets and institutions influence the U.S. and global economies.

Create a 350- to 575-word summary to present your research.

Choose four financial markets or institutions. Briefly explain what each specializes in (mortgages, stocks, government securities, etc.).

Compare how each financial market you identified influences the U.S. economy and the global economy.

Cite references to support your assignment.

Format your citations according to APA guidelines.