ABSTRACT
Financial markets exhibit all the traits and behaviour of any other market for goods and services. Competition is dependent on ease of entry and absence of barriers to it, on the degree of concentration in the market, on the stability of oligopolistic or cartel arrangements and on product innovation. The pattern of demand for financial assets and services changes over time as the tastes of the consumers (asset holders) change, incomes increase and perceived risk-adjusted yield differentials widen or narrow. Financial innovation differentiates products but also provides different instruments for risk spreading and flexibility in rearranging the structure of portfolios.
