Global capital market is gaining depth everyday. Along with the development of this market, the liquidity is also growing at a rapid pace. Several surveys have shown that financial stocks are growing worldwide and their growth rate is much higher than that of global gross domestic products.
Capital market represents the securities market where stocks, bonds, and several other derivatives are traded, and both long and short-term debts are raised here. This market provides companies, as well as governments with necessary funding, and, simultaneously, grants investors with the opportunity to make regular income.
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The development of the global capital market can also be traced by the fact that the financial holdings of the world is growing quickly- it is estimated to be somewhere around $140 trillion, and this amount is expected to cross the $200 mark before the end of 2010.
With the emergence of the concept of globalization, the diversified world market has been transformed into a single market, which has resulted in the promotion of inter-country trade.
Because of this, there has been an increase in stature and an increase in capital flow, of which the United States of America, Europe and Britain share almost 90%.
In these circumstances, the US is playing a vital role in the development of the global capital market and, alone, is the destination of 85% of the net capital flow of the entire globe. Britain also plays a significant role in the market.
On the other hand, because of the rapid transformation of the Eurozone, its emergence as a financial power is causing positive changes. This could shift the pillars of the world economy, as the Eurozone is expected to soon stand on the same financial platform with its counterparts.