Capital Markets are relevant to the World Bank Group’s mandate and mission of ending poverty because they play a key role in the provision of long-term financing for strategic sectors of a country (government, corporates, infrastructure and housing financing and even within certain parameters Small to Medium Enterprise (SME) financing). Secondly, capital markets provide risk management tools for both financial sector participants and end users (including corporates but also users as diverse as agriculture producers). In this way capital markets contribute to economic growth, which in turn can have an impact on the reduction of poverty and increase shared prosperity. At the same time, well developed capital markets can serve as a "spare tire” for the financial sector, enhancing financial stability and reducing vulnerabilities to exchange rate shocks and sudden stops of capital flows.
