Stock markets as part of the national financial system

Abstract

The stock market plays a crucial role in a country's financial system, significantly impacting economic development and stability. It reflects the economic health of corporations and is instrumental in efficient capital allocation, fostering economic growth, and facilitating corporate financing. This paper delves into the stock market's comprehensive impact, highlighting its role in enhancing liquidity and democratizing wealth through direct investment opportunities for both individuals and institutions. It further explores the regulatory frameworks that safeguard market integrity and protect investors, as well as the influence of technological advancements on market accessibility and operations. Additionally, the study examines the global interconnectedness of stock markets and their implications for international economic policies, underscoring their critical role in capital formation and economic resilience. Through a review of literature and empirical evidence, this research sheds light on the challenges and opportunities within the stock market, emphasizing its pivotal position in the financial landscape and its adaptive role in the face of global uncertainties and technological shifts. This study aims to enrich the understanding of the stock market's function within the financial system, providing valuable insights for policymakers, investors, and academics