Question

Why has the global capital market grown so rapidly in recent decades? Do you think this growth will continue throughout the next decade? Why?

Answer 1

The biggest reason why we have seen a rapid growth in the global market is due to information technology and deregulation by governments. Financial services are very information-intensive. They rely on large volumes of information and numbers about markets, risks, exchange rates, interest rates, etc. The invention of the microprocessor is one of the main advancements behind the spike in information technology. This growth should continue as the technology we have now is allowing us to discover new technologies every day. With governments continuing to deregulate by restricting overseas expansions of their domestic financial services firms and continuing to keep countries’ financial firms from entering their capital markets.