In his paper, the author presents an overview of key mechanisms and instruments underpinning the operation of the Polish financial market. The paper focuses on the essentials, intentionally leaving out the detail. Also, it does not discuss financial market participants.

The financial market, which is so fundamental to any economy, can be defined as the sum total of economic activity and the accompanying legal operations occurring between entrepreneurs, whereby financial instruments are applied and specialised financial market institutions act as intermediaries. The operations relate to financial flows and allocation of financial resources. The market consists of several segments, according to the time during which the funds remain at the disposal of the financial institutions of a given market, and the final appropriation of the funds.

Money market is characterised by the short-term nature of the transactions concluded there. Within this market, we can distinguish the
T-bill and the interbank operations markets.

Capital market. The operations here usually relate to long-term investment. This market comprises the bank credit market and the securities market.

Futures market. The term of the instrument is defined by the parties to the transaction. The best known future transactions are conditional ones such as options or warrants and the unconditional forward, futures and swap contracts.

Deposit market. In this market, funds are appropriated for broadly understood savings purposes, through entrusting them to financial institutions. This market can be further divided into the bank deposit market and investment fund market.

Insurance market. Operates along similar principles as the deposit market, the difference being the legal title to claims on financial institutions in respect of certain amounts (which constitutes the base for payment of the compensation). This market can be broken into a property and personal insurance markets.

In the author's opinion it is worth noting that in the course of the Polish systemic transformation of the 90s (including legislative changes), a legal framework for the operation of a modern financial market was created. Admittedly, the particular financial institutions will have to be modernised, expanded or even restructured before reaching the world standard. However, the basic modern free market financial system is already in place and operative.