U.S. capital markets are where investors, small and large, put capital to work to drive innovation, economic growth and job creation. Our markets have long funded the best ideas and enterprises, enabling businesses to grow, governments to invest in infrastructure, and individuals to save for retirement and education.

The U.S. capital markets are the bedrock of our nation’s economy and the deepest and most liquid in the world. That depth and efficiency is evidenced by the size of our gross domestic product, the strength of the US commercial sector, the level of home ownership, and the vast national infrastructure across the fifty states in comparison to the rest of the world.

• The U.S. corporate bond market is the largest in the world: nearly 1,200 companies issued $1.7 trillion in corporate bonds in the United States to fund their operations and growth in 2017.
• 169 companies conducted IPOs in 2017 in the United States, raising $39.2 billion.
• Municipal issuers raised over $448.0 billion in 2017 to finance important community infrastructure projects including roads, bridges, hospitals and universities.

The historic success of the U.S. capital markets has been bolstered by a regulatory framework focusing on investor protection, transparency, safety and soundness.  The US regulatory structure was first put in place 85 years ago, and Congress and policy makers have continually reviewed and supplemented it to keep pace with market developments and a changing national and global economy.

The US and other jurisdictions adopted an unprecedented volume of new regulations over the last decade, affecting everything from market structure to capital standards and balance sheet liquidity.  Our system is more transparent, safe and sound than in 2008.

• All banks are subject to higher capital requirements. For the largest banks, aggregate CET1 (the core measure of a bank’s financial strength) is up 72% since the crisis, to $1.1 trillion from $634 billion.
• The largest institutions are subject to forced liquidation designed to shield taxpayers and mitigate systemic risks.
• Banks must hold high quality liquid assets on their balance sheet to cover severe market disruptions and new capital for trading activities.
• OTC derivatives, a critical financing tool for all types of businesses, agriculture and governments, are subject to a vast new regulatory regime and market structure, including new capital and margin requirements and most such transactions are now centrally cleared.
• Short term financing transactions are subject to new clearing and margin requirements.

Policymakers have acknowledged that some changes may have gone too far, adversely impacting market efficiency and liquidity at the expense of economic growth potential. In order to help maintain the strength of our capital markets, we need to constantly evaluate the financial regulatory system to consider how it should evolve to continue to support our markets and facilitate investment and growth opportunities.

For a closer look at various key market segments today, from munis to derivatives, visit our market snapshot.

Kenneth E. Bentsen, Jr. is president and CEO of SIFMA.

2018 Snapshot

• State of the Capital Markets

  A snapshot of the capital markets in 2018, including key developments and statistics in Corporate Credit, Derivatives, Equities, Market Infrastructure, Municipal, Repo and U.S. Treasuries, and Securitization

See Also

• US Capital Markets & Financial Institutions Primer

  Let's start at the beginning: what is the function of the capital markets? How is a financial institution structured? Why do capital markets matter?