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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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.
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.