ABSTRACT
In this chapter we intend to scrutinize closely the salient features of the contemporary international capital markets. The chapter is an overall inclusive generalized study of developments in the second quinquennium of the 1980s. We review trends in the main market segments and seek to analyse the principal forces behind these developments, in particular investor and borrower behaviour under changing macroeconomic environment and market conditions. The study also includes an examination of the financing of current account imbalances among the major industrialized countries and a review of recent developments affecting capital market financing of the developing countries. Some of the important related issues such as efforts to promote an efficient and stable system of capital markets, increased utility and popularity of the derivative instruments and recent successes in resolving the developing country debt dilemma are also investigated. The exposition is based on the statistics and information that the IMF routinely compiles.
