A market is a place where supply for a particular good is able to meet demand for it. The function of financial markets in the economy. Financial market is a market for the creation and exchange of financial assets. The banks and financial market both in turn lend the funds to business firm which is called deficit unit. Financial Market, in very crude terms, is a place where the savings from various sources like households, government, firms and corporates are mobilized towards those who need it.Alternatively put, financial market is an intermediary which directs funds from the savers (lenders) to the borrowers. Functions of Financial Markets: Financial markets perform following four important functions… This is the whole concept of the financial market. Households will use their savings to buy financial instruments and commodities such as shares, stocks, debentures etc. In the case of financial markets, the good in question is money. In other words, financial market … It assists in deciding the securities price by interaction with the investors and depending on the demand and supply in the market. Mentioned below are the important functions of the financial market. Functions of the financial market. It mobilises savings by trading it in the most productive methods. This way a financial market serves an allocative function … The financial market … The Forex market often combines different financial markets. Bank and financial market are competitor of each other. For example, you can trade various CFDs, such as metals, oil, shares and stock indexes at LiteForex, thus starting your career in the financial markets. Functions of Financial Market.