The International Financial Market is the place where financial wealth is traded between individuals (and between countries). It can be seen as a wide set of rules and institutions where assets are traded between agents in surplus and agents in deficit and where institutions lay down the rules.
The financial market comprises the markets strictu sensu (stock market, bond market, currency market, derivatives market, commodity market and money market), the institutions which work in them with different aims and functions (Central Bank, Ministry of Economy and Finance, Monte Titoli, Borsa Italiana and CONSOB), as well as direct/indirect policies orientated to making the market the place (not necessarily a physical place and not necessarily ruled but regulated) where the exchange between surplus and deficit units is carried out as efficiently as possible.
With regard to policies, consideration must be given to those connected with monetary, fiscal and more structural policies, as well as those directly connected with the governance of the market itself.
Governance in the financial market can be defined as a set of rules useful in interconnecting the agents who operate within it and the institutions. These rules define the market.
Governance rules in a financial market can be defined at both a microeconomic and macroeconomic level.
Microeconomic rules deal not only with individuals (single money savers, professional agents, and companies) but also with the market itself and its microstructure. Macroeconomic governance rules deal with the market as a whole, but they are also strictly connected with policies regulating the market.
At a macroeconomic level, governance is important for the financial market in order to define every single rule of the trading process: from those which regulate the stock exchange or the Over The Counter (OTC) trades to those which define who can join the market. Moreover, great importance is given to the market microstructure, where microstructure is understood as the set of rules that makes and defines the asset exchange price. This is a main point in allowing the market to function properly. The liquidity/thickness/depth of the market depends on the price formation rules according to which the asset is traded off. At a microeconomic level, the steps to trade assets on the financial market are: listing, trading, and post-trading. The latter comprises clearing, settlement, and custody. From the market insiders’ point of view, each of these steps needs to be defined in order to conclude the exchange at a time and price previously defined. Each step has its own rules that allow those who operate in the financial market to establish their own strategy with respect to their specific expectations. The traded asset returns are linked to the definition of these rules. Each market has its own rules that deal with the microstructure. Different markets have different liquidity and this depends on the micro-rules that they themselves have established. These rules are relevant both for (official) exchange trading and for the OTC trading.
Another class of microeconomic governance rules are those which state, for instance, who can operate in the market and how. Microeconomic rules also concern the manner in which the institutions themselves operate in the market .

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