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Introduction:
Well-functioning financial markets are the backbone of a thriving economy. They provide not only a platform to efficiently rse and allocate capital but also manage risks, determine asset prices and guide investor decisions. The OECD's efforts on financial market policy m at fostering an optimal environment through robust regulations for capital markets, sustnable finance, digital innovations, public debt management, financial literacy and protection, pensions, and insurance sectors.
The Importance of Financial Markets:
Strong capital markets play a crucial role in economic prosperity by enabling businesses and governments to access funding they require. They promote flexibility in public finances and contribute to financial stability, inclusive growth, and market transparency. As the world faces challenges such as decarbonization, aging populations, technological advancements, and more, well-regulated financial markets are essential for ensuring that resources are allocated effectively.
Evolution of Capital Markets:
Over the past years, capital markets have seen substantial changes with a growing demand for sustnable finance instruments and an evolving digital landscape. Sovereign and corporate bond markets have notably expanded since 2008, totaling nearly $10 trillion as of 2023. Global government debt is forecasted to increase by $30 trillion from its pre-pandemic level by 2024.
The Rise of Sustnable Finance:
The sustnable bond market has been a game-changer in financing the transition towards a low-carbon economy. As it grew rapidly since 2018, it reached $4.3 trillion at year- 2023 and accounted for over half of total corporate issuance. The growth demonstrates how financial markets are adapting to meet environmental goals.
Navigating Digital Finance:
As digital finance expands its reach worldwide, it brings both opportunities and risks that require careful consideration. With the rise in financial fraud, understanding capital allocation, risk management, and market frness becomes more important than ever for mntning investor trust and protecting market integrity. The OECD's insights into financial literacy underscore the need to empower people financially.
:
In an era of increasing complexity and change, well-functioning financial markets are essential for sustning economic growth and ensuring financial stability. By promoting efficient capital markets, adapting regulations to meet sustnable finance demands, understanding digital finance risks, and safeguarding public debt management practices, we can harness their power to drive progress while mitigating potential vulnerabilities.
Organisation for Economic Co-operation and Development
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Efficient Financial Markets for Growth and Stability OECDs Role in Global Financial Regulations Sustainable Finance: The Future of Capital Markets Evolution of Bond Markets Post Pandemic Navigating Digital Finance Risks and Opportunities Impact of Capital Allocation on Economic Progress