Capital Market
A capital market is a financial market in which long-term debt (over a year) or
equity-backed securities are bought and sold, in contrast to a money market
where short-term debt is bought and sold. Capital markets channel the wealth of
savers to those who can put it to long-term productive use, such as companies or
governments making long-term investments. Financial regulators like the
Securities and Exchange Board of India (SEBI), Bank of England (BoE), and
the U.S. Securities and Exchange Commission (SEC) oversee capital markets to
protect investors against fraud, among other duties. [O'Sullivan A.,
Shjsnsbeffrin S. p.145]
Transactions on capital markets are generally managed by entities within the
financial sector or the treasury departments of governments and corporations.
Still, some can be accessed directly by the public. For example, in the United
States, any American citizen with an internet connection can create an account
with TreasuryDirect and use it to buy bonds in the primary market. However,
sales to individuals form only a tiny fraction of the total volume of bonds sold.
[Lequiller F., Blades D. p. 145-148]
O'Sullivan A., Shjsnsbeffrin S. (2003). Economics: Principles in Action. Upper Saddle River: Pearson Prentice Hall.
Lequiller F., Blades D. (2006). Understanding: National Accounts. Paris: OECD