Role of Capital Market in Growth of Economy

Last updated on April 15th, 2022 at 10:21 am

Capital Market is one of the most confronted sectors of the financial services industry. The dynamics of the changing global industry, including new regulations and business models have laid impact on the performance of the capital market and its instruments. Capital markets basically focus on wealth management and are engaged in cash management, asset management, protection, credit, retirement and estate planning, fixed income, equities, and financial and credit derivatives.
Indeed, capital market firms target customers with a range of products as solutions to individual wealth management needs. Apart from managing wealth products, capital market plays an important role by contributing to the growth of the country’s economy.

  • Provides several avenues for investment opportunities that encourage a thrift culture beneficial in increasing country’s savings and investment ratios that are essential for rapid industrialization.
  • In order to enhance economic productivity, it encourages the participation of private sector in productive investments by promoting public-private sector partnerships.
  • Improves the efficiency of capital allocation through competitive pricing mechanism for better utilization of scarce resources for increased economic growth.
  • It encourages equity capital investment and infrastructure development while complementing its effort in financing essential socio-economic development, through raising long-term project-based capital.
  • It helps in diffusing stresses on the banking system by matching long-term investments with long-term capital.

Imarticus Learning offers well-recognized Capital Market Course which will give you an edge on Capital Markets in today’s highly competitive finance industry.

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