Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based (e.g. retail, corporate, investment banking).
[5] Fixed capital is money firms use to purchase assets that will remain permanently in the business and help it make a profit.
Normally, a financial instrument is priced accordingly to the perception by capital market players of its expected return and risk.
Unit of account functions may come into question if valuations of complex financial instruments vary drastically based on timing.
Like money, financial instruments may be "backed" by state military fiat, credit (i.e. social capital held by banks and their depositors), or precious metals resources.
Governments generally closely control the supply of it and usually require some "reserve" be held by institutions granting credit.
Such trading reveals differences in probability of debt collection or store of value function of that currency, as assigned by traders.
Other instruments, such as citizen entitlements, e.g. "U.S. Social Security", or other pensions, may be indexed to the rate of inflation, to provide a reliable value stream.
Such relationships and policies are characterized by a political economy – feudalist, socialist, capitalist, green, anarchist or otherwise.
It is common in Marxist theory to refer to the role of finance capital as the determining and ruling class interest in capitalist society, particularly in the latter stages.