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Economic Studies, Country Reports Article, global financial markets
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Long-term trends in the global capital markets

  • Volatile financial markets, such as those facing executives and policy makers in early 2008, generate anxiety. More important, though, are long-term structural trends in the world’s capital markets.
  • Recent McKinsey Global Institute research highlights several critical long-term trends, such as increased ties between the financial markets of the developed and emerging worlds, the shift of financial weight in Asia from Japan to China, the eurozone’s growing financial clout, and the burgeoning financial role of Middle Eastern countries.
  • Although the United States will gradually cede some of the spotlight to other countries, the size and depth of its capital markets will continue to give them a prominent role.
This article contains the following exhibits:
  • Exhibit 1: The volume of global financial assets continues to expand.
  • Exhibit 2: Increases in the financial depth of markets around the world have been broad based.
  • Exhibits 3a & 3b: The global web of cross-border investments is growing.
  • Exhibit 4: The value of financial assets in emerging markets reached $24 trillion in 2006.
  • Exhibit 5: Since 2002, emerging markets have been net providers of capital to the world
  • Exhibit 6: Japan accounted for just 6 percent of foreign investments in emerging Asian countries.
  • Exhibit 7: The eurozone accounted for 44 percent of the growth in cross-border investment from 1996 to 2006.
  • Exhibit 8: The value of euros in circulation surpassed that of dollars in April 2007.
  • Exhibit 9: Despite the flourishing of the eurozone, the United States remains the world’s largest financial market.
  • Exhibit 10: Foreign ownership of financial assets has increased across all regions of the world.

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