In the wake of the pandemic and an unequal economic recovery, global capital markets are being transformed by a number of interrelated forces. The following six areas will be central to better understand the dynamics shaping the future of capital markets, in the view of economists at BNY Mellon.
Democratization of public markets
“Today, market data is readily accessible online and new technologies have significantly reduced the cost of trading and other barriers to entry. This means that more people can trade, at any time, from anywhere. Increased access to markets is a positive development, but it is not without risk. It raises important questions about market and institutional resilience, and investor safeguards, as well as opening a broader discussion on financial education.”
Greater access to new wealth creation opportunities
“New products are being developed that allow retail investors to allocate capital to private market alternatives. Here again, challenges surface when opening these products to a larger community of investors. People need to know about the associated risks, which differ materially from investing in traditional stocks and bonds.”
Blurring of public and private markets
“More companies than ever before are entering public markets worldwide, and yet in the US we are seeing firms remain private for longer, and others electing to transition from public to private. This trend is fuelled by heightened disclosure requirements and regulatory scrutiny for publicly-held firms, as well as investor eagerness to fund private companies. Firms are also exploring other avenues to raise capital and reduce dependency on equity markets.”
Concerns around data and cyber security
“Data is emerging as its own asset class, and data management infrastructure is a key growth area for traditional financial firms. Institutions are actively seeking ways to leverage analytics to remain nimble and promote growth. But questions remain around how firms can innovate safely, benefiting from a more agile use of data while mitigating risks.”
New roles for financial firms
“Blockchain and distributed ledger technologies have the potential to disrupt core functions within capital markets, including trading processes, settlement systems, payments, and capital raising. At the same time, regulators and lawmakers are increasingly vocal about concerns around cryptocurrencies, raising important questions around their future viability as an asset class.”
Transparency around ESG
“ESG is a top priority for financial firms. As investors, asset owners, and corporations navigate their roles in supporting the transition to net-zero and stakeholder capitalism significant questions remain about what market structures and tools are needed to support sustainable investing.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD clings to gains near 1.0900 as USD remains weak
EUR/USD has regained its traction and climbed to the 1.0900 area in the American session following a technical correction early in the day. The persistent US Dollar weakness amid improving risk mood allows the pair to keep its footing in the second half of the day.
GBP/USD stabilizes above 1.2300 on BOE day
Following a pullback with the initial reaction to the Bank of England's policy announcements, GBP/USD has regained its traction and climbed above 1.2300. The pair remains on track to post gains for the second straight day as the US Dollar struggles to find demand.
Gold: XAU/USD approaches $2,000 amid broad US Dollar weaknes Premium
Spot gold retains its positive momentum and trades around $1,995 a troy ounce on Thursday. XAU/USD is extending its post-Fed advance, as the American central bank came out with a dovish message on Wednesday, triggering a dollar’s sell-off.
Breaking: Terraform Labs founder Do Kwon arrested in Montenegro: Interior minister
Terraform Labs' founder Do Kwon is arrested, according to Minister of Interior of Montenegro Filip Adzic. This is a developing story and will updated
Ford (F) Stock News and Forecast: $3 billion EV loss leads shares to advance
Ford (F) stock is demonstrating on Thursday exactly why automotive C suites are pivoting to electric vehicles. It is not because of the environment or due to easy profits. It is because the market likes it.