Business

THE ROLE OF THE CAPITAL MARKET IN THE

ECONOMIC DEVELOPMENT

Ovidiu STOICA

Abstract

Taking into account the apart role in the market economy, the capital market occupies

an important place, through their specific mechanisms, succeeding to give its contribution to

the economic development of the society. In consequence, the public authorities must notice the

importance of the capital market in the national economy and, on the other hand, to make the

efforts for insuring the necessary framework for the normal functioning of its specific

mechanisms.

The valences of the capital could be even more interesting in the case of emerging

markets – like the Romanian capital market – being well-known its contribution in reorienting

financial resources to efficient activities, contributing to the economic reform, but also being

interesting in the privatisation process.

Key words: capital market, direct and indirect financing, primary and secondary market, role

of capital market

JEL Classifications: E44, G14, N20, O16

In a market economy, the role of the capital market is very important.

The good functioning of the capital market is vital in the contemporary

economy, in order to achieve an efficient transfer of monetary resources from

those who save money toward those who need capital and who succeed to offer

it a superior utilisation; the capital market can influence significantly the

quality of investment decisions. The gathering of temporary capitals that are

available in the economy, the reallocation of those that are insufficiently or

inefficiently used at a certain moment and even the favouring of some sectorial

reorganisations, outline the capital market’s place in the economy of many

countries.

Among the mechanisms which are specific for the capital market, the

mechanism of financing the economy is the most important one, although, due

to the fact that an ensemble of interconnected mechanisms contribute to the

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