Capital Markets

Capital markets are financial systems where buyers and sellers engage in the trade of long-term debt or equity-backed securities, facilitating the transfer of capital from entities with surplus funds to those requiring capital for productive investment.

Why it matters

Enables long-term capital formation necessary for infrastructure development and industrial expansion.
Provides a mechanism for efficient price discovery of financial assets based on market demand and supply.
Offers diverse investment avenues for household savings, promoting financial inclusion and wealth creation.
Enhances corporate governance by subjecting listed entities to public scrutiny and regulatory oversight.

How it is asked

Focus on the role of regulatory bodies in maintaining market integrity, the distinction between primary and secondary markets, and the impact of capital market reforms on the broader macroeconomic stability.

In the syllabus

In the news

250words.in · https://250words.in/topics/capital-markets