How damaged are investment capital markets today?

Abstract

Purpose

Investment capital markets have been displaying signs of disarray and are significantly damaged. This is especially manifest in the case of the USA and some countries in Europe. Symptoms of this damage are visible. The operators are declining in number, contracting in scale and losing in asset base. The products are losing glitter and are shunned by investors. The monitors have lost creditably. And the regulators have failed at regulating. This is the focus of the following article. An analysis of damage incurred within the investment capital market and the possible projection of damage parameters within a conceptual and operational model. The paper aims to discuss these issues.

Design/methodology/approach

The paper starts with a definition of the damage concept, proceeds to relate damage to four forces, i.e. players, products, monitors and regulators and concludes with a conceptual and operational model for damage analysis. The paper is eclectic relying on finance, macro-economic and strategic management analytically frameworks.

Findings

A definition of investment capital market damage is proposed and an identification of several strains of this damage is made. Prime among the strains is malignant operator concentration, monitor misleading self-interest and product failure. The damage concept could be contained within a conceptual and operational model.

Practical implications

The derived model could provide a base for countrywide investment capital market damage level assessment and directions for policy and strategy response especially for organizations as the World Bank and the IMF.

Originality/value

The issue addressed is possibly never conceptually tackled within investment capital market analysis.

Citation

El Namaki, M.S.S. (2014), "How damaged are investment capital markets today?", Competitiveness Review, Vol. 24 No. 1, pp. 51-58. https://doi.org/10.1108/CR-06-2013-0057