The capital market provides financing to meet the denomination,
liquidity, maturity, risk (with respect to credit, interest rate,
and market), and other characteristics desired by those who have a
surplus of funds and those who have a of funds. The capital market
as a whole consists of overnight to long-term funding. The short to
medium end of the maturity spectrum is called the money market
proper, and the long end is identified as the capital market. The
financial instruments range from money market instruments to
thirty-year or longer bonds in credit markets, equity instruments,
insurance instruments, foreign-exchange instruments, hybrid
instruments, and derivative instruments. There has been an
explosion of innovation in the creation and development of
instruments in the money and capital markets since about 1960 in
both debt and equity instruments.
-Jennifer
