Size of the Market

Estimating the overall size of the financial markets is difficult. In the first place it is hard to
decide exactly what transactions should be included under the expression “financial markets”, and there
is no practical way to compile complete data on each of the millions of sales and purchases occurring
each year.

Table 11-1: The world’s financial markets

2015 2016 2017 2018

International bank loans 13.6 22.6 20.4 27.0
International debt 11.5 18.9 21.9 21.3
securities
Domestic debt securities 44.1 59.8 62.5 68.7
Equities 37.2 32.6 54.6 67.2
Other 5.2 8.0 8.4 8.8
Total value outstanding 111.6 141.9 167.8 193.0

In this figure the market in 2018 is estimated for approximately 200 trillion dollars of capital.
However, this excludes many important financial activities, such as insurance underwriting, bank lending
to individuals and small businesses, and trading in financial instruments such as futures and derivatives
that are not means of raising capital. If all these other financial activities were to be included, the total
size of the markets would be much larger.

Cross-Border Measure

Another way of measuring the growth of finance is to examine the value of cross-border
financing. Cross-border finance is by no means new, and at various times in the past (in the late 19 th
century, for example) it has been quite large relative to the size of the world economy.

The period since 1990 has been marked by a huge increase in the amount of international
financing broken by financial crises in Asia and Russia in 1998, the recession in the United States in 2001,
and the financial meltdowns of 2008=09 in the United States and 2008-13 in Europe. The total stock of
cross-border finance was more than 46 trillion dollars, according to the Bank for International
Settlements.

International Bond Market, Eurobonds and Eurocurrencies

Foreign bonds

- traditional instruments in the international bond market.

- Sold in a foreign country and are dominated in that country’s currency.

For example:

If the German automaker Porsche sells a bond in the United States denominated in U.S. dollar.