The Importance of Financial Markets Financial markets allow companies,governments,and individuals to increase their utility Savers have the ability to invest in financial assets so they can defer consumption and earn a return to compensate them for doing so Borrowers have better access to the capital that is available,allowing them to invest in productive assets Financial markets also provide us with information about the returns that are required for various levels of risk7 The Importance of Financial Markets n Financial markets allow companies, governments, and individuals to increase their utility q Savers have the ability to invest in financial assets so they can defer consumption and earn a return to compensate them for doing so q Borrowers have better access to the capital that is available, allowing them to invest in productive assets n Financial markets also provide us with information about the returns that are required for various levels of risk