Primary financial markets play in the current economy

 

What role do primary financial markets play in the current economy? What role do secondary markets fill? Describe the relationship between financial institutions and financial markets and suggest a method by which this relationship could run smoother. Support your rationale with at least one citation from the literature.

 

 

Sample Solution

Primary financial markets play in the current economy

Financial markets are forums in which suppliers of funds and demanders of funds can transact business directly. Functions of financial markets include allowing transfers of funds from business or individual without investment opportunities to one who has them. Primary market is the one which “new” securities are sold. The secondary markets can be viewed as “pre-owned” securities market. The key function of the primary market is to facilitate capital growth by enabling individuals to convert savings into investments. It facilitates companies to issue new stocks to raise money directly from households for business expansion or to meet financial obligations.

-84 years were seen as the fastest growing age group in the world, growing at a rate 3.8% per year with one fifth of the older population envisaged to be eighty years and older by 2050 (United Nations, 2002). Adult social care, including care of an ageing population, is one of the big issues England face at present. The provision of adequate adult social care poses a significant public service challenge. Demand for care due to ageing population is rising while public spending is falling. On average, older people using social care services today have greater needs than their counterparts 10 or more years ago. The health status of older people has slightly deteriorated over the past decade, probably because of longer life expectancy. A report by (CHPI, 2016) highlights that around £24 billion is spent on adult social care in England every year, most of which is spent on older people receiving care either in their own homes or in a residential. In social care, the 1989 White Paper, Caring for People, emphasised the need to improve choice and deliver services that respond flexibly to individual needs (Means et al. 2003). Prior to the White Paper, social care services were predominantly funded, organised and directly delivered by local state-funded (‘in-house’) providers. 2.1.2 History of social care Government provision for social care for older people in difficulty has a long history in England and across the United Kingdom. From the 1601 Elizabethan Poor Law with services funded through parish rates, and the reformed 1834 Poor Law Amendment Act, with its emphasis on social control as much care and compassion (Harris, 2005) to the 1948 National Assistance Act, which ended the Poor Law, and brought about the ‘Welfare State’. Since 1979 there has been a remarkable shift in social care provision. In 1979, 64% of care home beds were provided by local authorities and National Health Service (NHS). In 1993, 95% of domiciliary care was directly provided by local authorities. Laing and Buisson (2007) have found that in England, 78% of places in residential and nursing homes which have older people as their main clients were in the private sector. By 2012, only 11% of domiciliary care was provided by local authorities. This growing role for private sector involvement in social care provision, dictated by neoliberal ideology, has accompanied this shift. In trying to shape the relationships between public, private and voluntary sector bodies in the delivery of social care services, successive governments constructed the social care markets, starting with the rapid increase in the use of the residential care allowance for private care homes in the 1980s, the growth in outsourcing home care in the 1990s, and the closure and or sale of local authority care homes. In the last 30 years or so the elderly social care system in the UK has undergone significant metamorphosis. The Community Care report by Griffith (1988), and the articulation of this into a solid policy base in the NHS and Community Care Act (1990), set the scene for the ensuing transformations in the delivery of social care services and remains the defining point in the development of today’s system. Griffith (1988) proposed a split between health and social care. Health boards remained responsible for acute and primary health care, but local authorities took responsibility for long term care. Local authorities were to be responsible for assessing and responding to the needs of individuals in their regional areas but their role as direct providers of care services was diminished. This was the beginning of what is now called the ‘mixed economy’ of social care services (Wistow et al 1994). The inde

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