Capital markets - Definition and Overview

The capital market is the market for long-term loans and equity capital. Companies and the government can raise funds for long-term investments via the capital market. The capital market includes the stock market, the bond market, and the primary market. Securities trading on organized capital markets is monitored by the government; new issues are approved by authorities of financial supervision and monitored by participating banks. Thus, organized capital markets are able to guarantee sound investment opportunities.

The capital market can be contrasted with other financial markets such as the money market which deals in short term liquid assets, and futures markets which deals in commodities contracts.

See also

• Financial market