A financial market is a broad term describing any marketplace where trading if securities including equities, bonds and derivatives occurs

Deregulation of the financial markets can be explained with the help of the following points:

1) Deregulation of financial markets would include the withdrawal of any form of government authoritative control on the policies, programs and so on of the financial markets.

2) Lack of central restrictions, the financial markets will experience more intense competition than before. This will then lead to a more efficient allocation of the resources and capital stocks with countries and within the country.

3) Financial deregulation on the financial markets would also imply that the transactions and trade-offs taking place on an international level would increase the quantity in which financial transactions will take place which will obviously be more than the flow of goods across the market.

4) Interest rates are subject to major fluctuations and unprecedented changes when the financial market is deregulated.