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that connect investors and borrowers, either directly (investment banks) or indirectly (commercial banks). capital market loans can be equity or debt.[r]
(1)International Business
9e
By Charles W.L Hill
(2)Chapter 12
(3)123
Why Do We Have Capital Markets?
Capital markets bring together investors and
borrowers
investors - corporations with surplus cash,
individuals, and non-bank financial institutions
borrowers - individuals, companies, and
governments
markets makers - the financial service companies
that connect investors and borrowers, either directly (investment banks) or indirectly (commercial banks)
(4)Who Are The Main Players in Capital Markets?
(5)125
What Makes The Global Capital Market Attractive?
Today’s capital markets are highly
interconnected and facilitate the free flow of money around the world
Borrowers benefit from the additional supply of
funds global capital markets provide lowers the cost of capital
Investors benefit from the wider range of
investment opportunities
(6)How Have Global Capital Markets Changed Since 1990?
Global capital markets have grown rapidly
the stock of cross-border bank loans was just $3,600
billion in 1990, but $32,430 in 2010
the international bond market has grown from $3,515
billion in 1997 to $26,613 in 2010
international equity offerings were just $18 billion in
1990, but grew to $750 billion in 2009
The growth in the markets is a result of
1.Advances in information technology
(7)127
What Are The Risks Of The Global Capital Markets?
Question: Could deregulation of capital markets
and fewer controls on cross-border capital flows make nations more vulnerable to the effects of speculative capital flows?
can have a destabilizing effect on economies 2008-2009 global financial crisis
Speculative capital flows may be the result of
inaccurate information about investment opportunities
if global capital markets continue to grow, better