Capital Markets Depth & Development

The capacity to raise capital through markets: equity and debt markets with the depth, liquidity and institutional quality to fund firms and the sovereign at scale.
Economic Power / Financial Strength / Financial System Depth & Access

The capacity to raise capital through markets: equity and debt markets with the depth, liquidity and institutional quality to fund firms and the sovereign at scale.

Indicators

  • Stock market capitalisation to GDP
  • Corporate bond market size to GDP
  • Market turnover and liquidity
Capability Developments

Major milestones and key developments of the capability

The Capability Development Index tracks the events that move a capability — operational use, technical breakthroughs, procurement decisions and the industrial base behind them — and places each on the record with the date it happened.

Recent developments cover the current period. Historical developments are the inflection points that produced Capital Markets Depth & Development as it stands today.

GovernanceSecurityTechnologyEconomy

Historical Developments

1171The Republic of Venice converted forced loans from citizens into tradable government debt 855 years ago

The prestiti system paid interest to citizens compelled to lend the state money to fund its wars, and claims on that interest were bought and sold among Venetians, establishing the basic mechanics of the sovereign bond centuries before Europe's national debt markets existed.

1602The Dutch East India Company issued the first tradable public shares 424 years ago

Investors bought certificates representing part-ownership of the company's voyages, and trading in them at Amsterdam created the world's first continuous secondary market in equity, a template later copied by every stock exchange founded since.

1792Twenty-four New York brokers signed the Buttonwood Agreement 234 years ago

Their pact to trade securities among themselves on fixed commission, made under a buttonwood tree on Wall Street, became the founding document of what grew into the New York Stock Exchange.

20th centuryCorporate finance relied chiefly on bank loans rather than market borrowing 126 years ago

Through most of the twentieth century, company finance other than share issues was raised predominantly through bank lending. This left capital markets a secondary channel for corporate long-term funding, with banks acting as intermediaries between savers and firms.

20th–21st centuryInternet brokerage made market accounts cheap and widely accessible to individuals

In the twentieth century only a few wealthy individuals could afford an account with a broker, but browser-based platforms later made accounts much cheaper and accessible over the internet. Private companies now provide systems allowing individuals to buy shares and sometimes bonds in secondary markets, modestly raising retail participation.

1929The Wall Street Crash ended the decade's equity boom and speculative margin lending 97 years ago

Share prices fell by around 90 per cent from their peak over the following three years, wiping out household savings and pushing lawmakers toward the disclosure and anti-fraud rules that still govern how companies raise money from the public.

The US Securities and Exchange Commission was created to police the new rules
1980Large creditworthy companies began disintermediating banks by borrowing directly on capital markets 46 years ago

From around 1980 an ongoing trend of disintermediation set in, as large and creditworthy firms found they paid less interest by borrowing directly from capital markets than from banks. This shifted the balance of long-term corporate finance towards bond and equity issuance.

1986The City of London's Big Bang deregulated Britain's securities markets overnight 40 years ago

Abolishing fixed commissions and opening exchange membership to foreign and non-member firms, the reform moved trading onto screens instead of the floor and turned London into the leading centre for international bond and equity dealing.

1990China reopened stock exchanges in Shanghai and Shenzhen 36 years ago

Closed since the 1949 revolution, the reconstituted exchanges gave state enterprises a route to raise equity capital for the first time in decades, beginning the build-out of what is now one of the world's largest stock and bond markets.

1997The Asian financial crisis exposed the fragility of emerging bond and equity markets 29 years ago

Currency collapses in Thailand, Indonesia and South Korea triggered capital flight from regional stock and bond markets, forcing IMF-led rescues and prompting a generation of emerging economies to build larger foreign exchange reserves and deeper local-currency bond markets.

1997Governments of larger nations began selling bonds directly online, bypassing investment banks 29 years ago

Where governments had traditionally used investment banks to organise bond sales, from 1997 it became increasingly common for larger states to make bonds directly available for purchase online. Platforms such as the US TreasuryDirect allow citizens to buy bonds in the primary market, though individual sales remain a small fraction of total volume.

2000The dot-com crash wiped out most of the decade's technology listings 26 years ago

The Nasdaq lost around three-quarters of its value over the following two years as speculative internet-company valuations collapsed, closing the IPO window for years and reshaping how equity markets priced unprofitable growth companies.

21st centurySeveral governments shifted borrowing into long-dated bonds to reduce market pressure

In the twenty-first century a number of governments sought to lock in as much of their borrowing as possible at long maturities. Longer-dated issuance reduced their exposure to short-term refinancing pressure from bond markets.

2002Malaysia issued the first global sovereign sukuk 24 years ago

The $600 million Islamic bond, structured to avoid interest payments through an underlying asset arrangement, opened international capital markets to sharia-compliant government borrowing and seeded a sukuk market now worth hundreds of billions of dollars.

Recent Developments

June 2026US capital markets delivered record first-half IPO proceeds 2 months ago

Initial public offerings raised $251 billion in the first half of the year, led by Alphabet's $85 billion equity raise and SpaceX's $86.2 billion offering, the largest IPO on record, while corporate bond issuance reached $1.23 trillion through May, up 21 per cent on the year before.

June 2026Hong Kong's stock exchange posted its strongest first half for listings in five years 2 months ago

IPOs raised HK$209.9 billion across 85 deals in the first half of 2026, up 92 per cent on the same period a year earlier, as 24 dual mainland-Hong Kong listings and 13 specialist technology offerings already exceeded their full-year 2025 totals.

February 2026Brazil's B3 exchange climbed to record highs 6 months ago

The Ibovespa index reached an all-time high of 192,624 points, up more than 40% over twelve months, as the exchange's roughly 358 listed companies carried a combined market capitalisation of around $870 billion.

February 2026Saudi Arabia opened the Tadawul to all foreign investors 6 months ago

The Capital Market Authority scrapped the qualified foreign investor regime and its $500 million asset threshold from 1 February, removing the last barrier to direct retail and institutional access and prompting the strongest month of foreign buying since 2022.

February 2026Sub-Saharan African governments returned to international bond markets at their fastest pace since 2013 6 months ago

Kenya, Ivory Coast and other issuers raised almost $6 billion in a few weeks, led by Kenya's $2.25 billion dual-tranche eurobond priced to fund a buyback of its 2028 and 2032 notes, as investor appetite for African sovereign risk recovered.

Ivory Coast drew the heaviest demand of the wave
Nigeria also tapped the market
2026 to dateVietnam eased foreign access to its stock market this year

New rules introduced a global broker model that removes the requirement for foreign institutions to hold a local trading account or pre-fund purchases, part of a wider financial market overhaul intended to help the bourse win an emerging-market upgrade.

2026 to dateChina's panda bond market drew record foreign issuance this year

Yuan-denominated bond sales by foreign borrowers reached RMB170.2 billion in the year to date, 1.7 times the same period in 2025, taking outstanding issuance past RMB500 billion as the foreign share of new deals climbed from 27% in 2023 to 41%.

Kazakhstan and Pakistan joined Western banks as issuers
2026 to dateIndia's IPO market cooled after two record years this year

Initial public offerings raised about $5.78 billion so far in 2026, down from $7.32 billion in the same period of 2025, as issuers cut deal sizes and accepted lower valuations after India's share of Asia-Pacific equity capital markets volume reached 20% the previous year.

November 2025Hong Kong's government issued the world's largest digital bond 9 months ago

The HK$10 billion multi-currency digital green bond was the first globally to settle using tokenised central bank money, e-HKD and e-CNY, and drew strong demand from institutional investors making their first digital bond purchase.

2025India's securities regulator banned a major trading firm over index manipulation last year

The Securities and Exchange Board of India barred Jane Street from Indian markets over an alleged ₹4,843 crore scheme to move Bank Nifty options prices through large trades in the underlying stocks, part of a wider crackdown that has imposed multi-year market bans on other operators.

The regulator moved to overhaul short-selling rules
2012Hedge funds came to dominate short-term trading on major stock exchanges 14 years ago

A 2012 Financial Times article reported that hedge funds were making most of the short-term trades across large sections of the capital markets, including the UK and US stock exchanges. Increasingly trading with each other rather than with less sophisticated investors, they found it harder to sustain historically high returns.

2009Capital markets overtook bank lending as the leading source of long-term finance 17 years ago

According to the Financial Times, capital markets surpassed bank lending as the principal source of long-term finance in 2009. The shift reflected heightened risk aversion and tighter bank regulation following the 2008 financial crisis.

2008Central banks introduced quantitative easing, suppressing government bond yields 18 years ago

Following the 2008 financial crisis, quantitative easing further reduced the ability of private actors to push up the yields of government bonds. The effect applied to countries whose central banks could conduct substantial open market operations, altering the balance of power between sovereign borrowers and bond markets.

2008The collapse of Lehman Brothers froze global capital markets 18 years ago

The bankruptcy of a major US investment bank triggered a collapse in bond and equity issuance worldwide, forced emergency central bank intervention, and led governments to rewrite securities and derivatives regulation for the following decade.

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