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Capital Market

According the story of Mexico crisis, "the very weakness of the financially system can make the eventual crisis even worse by discouraging prompt adjustment of monetary policy in the lead-up the crisis "and can also complicate the policy response after the crisis has began."" (Lawrence H. Summer). As Jagdish Bhagwati concluded in his article that "countries have not opened up the foreign capital markets should remain closed until their trade is fully open and they have both political security with sounding banking system. Countries that have already opened will be interested in regaining the capital that fled."" .
             Countries with liberalized capital flows are also likely to have unexpected economic reversal that different from free good market. The research shows capital flows on many cases do not have the positive supports on growth. Even the costs of capital market liberalization have outweighed the benefits. .
             For example, the story of the recent Asian crisis could attest the cost of unrestricted capital market. After policy of triumphed free market declared after 1990, banks in Asia was opened to foreigners for investing or buying local fund. Massive capital then inflowed in those Asian countries that agreed and followed the advice for liberal market. Most of the profits from free trade in Asia were used to buy land and the land price soared. Investment in turn which ended up as collateral for a very large proportion of the assets of the domestic financial system, using more like preference consumptions than substantial investment. Then given a crisis, foreign investors dump the local currency and the currency devalues. In order to keep foreign invests, government raised the interest rates which will further weaken banks and intensified the domestic problems. Though by raising the interest rate, foreign currency will be kept in the country, ongoing speculative investments might still cause the further dilemma.


Essays Related to Capital Market

1. Capital and Financial Markets

Capital markets are financial markets concerned with raising capital by issuing long term securities. The securities in capital market are issued in primary market and traded in secondary market. The primary market is a market for new shares, where the secondary market is the market where existing securities are traded. The most common type of securities which are traded in capital market is stocks, bonds and mortgages. ... Option is a type of financial derivative which is traded in capital market and represents a contract between two parties, the buyer and the seller where they agree to a ...

  • Word Count: 649
  • Approx Pages: 3
  • Grade Level: Undergraduate

2. Capital One Financial Corporation

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  • Word Count: 1842
  • Approx Pages: 7
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3. Venture Capital

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  • Word Count: 552
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4. My Stock Market Experience

My Stock Market Experience From looking at the price movements of my six stocks, I can conclude that the stock market is constantly fluctuating. ... The market price of stock depends heavily on the overall performance of a corporation in meeting its business objectives. If a company reaches its stated objectives, there are great opportunities for capital gains. ... My stock market experience has helped me understand the realities and risks of investing. ... My experience has taught me that the stock market is truly a roller-coaster ride. ...

  • Word Count: 297
  • Approx Pages: 1
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5. The Stock Market and the Economy

The Stock Market And The Economy The stock Market exists as means for businesses to grow. ... There are risks in the stock market. ... Historically, stocks have returned dividends and capital gains more than ten percent annually. ... The stock market is said to go hand in hand with the economy. Some say the stock market determines the economy, others say the market is determined by the economy. ...

  • Word Count: 502
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6. Australian Financial Market

The detailed and comprehensive information contained in this, the 14th annual Australian Financial Markets Report (AFMR) highlights one of the primary reasons for the Australian economy being one of the world's strongest performing in recent years - the existence of deep, liquid and sophisticated financial markets. The size and stability of Australia's financial markets play a vital role in the performance of the economy as a whole. ... Gains have been particularly strong in the swaps market where turnover rose 77 per cent to $2.6 trillion, and in the repurchase agreement market w...

  • Word Count: 398
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7. Stock market reforms in India

One of them is the stock market reform. ... Financial sector reforms were needed to remedy the structural weakness and inefficiencies in the stock markets, primary markets, banking and insurance sectors. ... The Indian corporate sector demanded these reforms in order to reduce the cost of capital and to enhance its competitiveness. ... The major measures recommended by the Narasimhan committee and the Pherwani committee set up to study the implementation of possible measures to strengthen the Indian financial sector, were: 1] Empowerment of the SEBI, 2] Access of foreign institutional invest...

  • Word Count: 906
  • Approx Pages: 4
  • Grade Level: Undergraduate

8. Economics - Capital

In markets, entrepreneurs combine the other factors of production, land, labor, and capital, in order to make a profit. ... Of course, just as with market entrepreneurs, the benefits may mostly accrue to the entrepreneurs themselves. ... But the real issue is about how well institutions they operate in (markets, planning, bureaucracies, government) serve the public. This concerns such issues as the relative importance of market failure and government failure. ... Intellectual capital[edit]. ...

  • Word Count: 772
  • Approx Pages: 3
  • Grade Level: Undergraduate

9. Markets and Oligopsony and Monopsonistic Competition

There will be deadweight loses because of the presence of market power which distorts the outcome. Oligopsony is a market where there are a few employers who have a large control on the going wage and use the market power to change the end results whereas monopsonistic competition occurs when there is free entry and exit in oligopsony market.... Figure 1: Monopsony or monopsonistic competition graph (Wikipedia, 2014) The standard theory of human capital said that firms do not invest on general training because there might be ex post wage competition between current firm and potential employer...

  • Word Count: 2083
  • Approx Pages: 8
  • Has Bibliography
  • Grade Level: Undergraduate

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