Comparison of the European and US capital markets

Gábor Tibor (2021) Comparison of the European and US capital markets. Külkereskedelmi Kar.

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Absztrakt (kivonat)

Comparison of the European and U.S capital markets   My thesis topic is the comparison of the European and US capital markets, which I chose because this is a very interesting and big topic which can be hard to see trough. In my thesis I would like to divide it into three parts. Firstly, the general information about the capital markets, secondly the similarities and lastly the differences. I am also going to discuss possibilities which can be or will be made in the future. In the following you can read my abstract: According to Investopedia “Capital markets are venues where savings and investments are channeled between the suppliers who have capital and those who are in need of capital. The entities that have capital include retail and institutional investors while those who seek capital are businesses, governments, and people.” (Kenton, 2019) These markets are closely monitored by financial regulators such as the Securities and Exchange Board of India (SEBI), Bank of England (BoE) and the U.S. Securities and Exchange Commission (SEC). These regulators are trying to protect investors from fraud and from other illegal activities. Capital markets are being present all over the world but mostly concentrated in the world’s financial hubs such as London, New York and Hong Kong. The capital markets are divided into two categories one being the primary market and the other one being the secondary market. On the primary markets usually governments and companies sell their bonds and stocks with the goal of raising long-term investments for themselves. These bonds and stocks are only allowed to sell once, and then they can go on the secondary market where they can be sold more than once. Here are investors are trying to find companies who issued stocks and bond with the hope of making financial gains on their capital by either holding them for a long time or re-selling them in a short period. “In the United States and the EU, where capital markets are supposed to be fully integrated, laws and institutions are intended to secure the free flow of capital. Two of the co-authors of the present paper have studied the patterns of capital flows between U.S. states and between regions within the EU countries. The studies show that capital flows between regions within countries such as the United States and Germany are consistent with the predictions of neoclassical models while those between European countries are not. An important question is then why capital is not flowing as freely between EU countries as between regions and whether this appears to be a permanent pattern or whether EU countries are becoming more like U.S. states.”- (Sebnem,Bent, Belgi 2007) This problem was alarming in the European Union so in 2015 European Union Commission proposed the idea of a Capital Markets Union (CMU) for all members of the European Union. Their goal by creating this Capital Market Union is to attract investors to the EU and create a more subtle financial system. Until recently they have laid the building blocks as a basis and progressing forward in the future from there. According to experts European and U.S capital market are functioning differently. One difference being the corporate funding. While companies in the EU are relying heavily on bank lending and not from the capital markets, U.S companies are the opposites of this scheme. Their primary goal in not to raise money from the banks instead of the money markets. According to Open Markets’ research by numbers this means a 80-20 percent split between the two main funding forms. They also think that the European capital markets are lagging behind the US capital markets. They estimate a 1 trillion-dollar USD difference between the two markets. Meaning that, if the European markets were as developed as in the US companies, they could raise 1 trillion dollars more money.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	beruházás, EU és az USA, összehasonlító elemzés, pénzügyi piacok, tőkepiac, tőzsde
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2021. Már. 01. 13:02
Utolsó módosítás:	2021. Szep. 21. 11:38

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