Capital Market

The capital market is the market in securities, including the stock market and the bond market. These markets are called “capital markets” because they are the primary source of long-term funding for corporations and governments. Investment in the capital market comes from large investors, including banks, pension funds, and insurance companies, but small individual investors also provide capital to corporations and governments through their investments in these markets.

The capital markets are divided into the primary market, where new issues are distributed, and the secondary market, where existing stocks and bonds are traded. Stock exchanges and brokerage firms are important components of the capital market. National financial regulatory agencies are responsible for regulating the capital markets in their countries.