Editing Capital market (section)

=== Contrast with money markets===
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The [[money market]]s are used to raise short-term finance; including loans that are expected to be paid back as early as overnight. In contrast, the "capital markets" are used to raise long-term finance, in the form of shares/equities, and loans that are not expected to be fully paid back for at least a year.<ref name="Principles"/>

Funds borrowed from money markets are typically used for general operating expenses, to provide liquid assets for brief periods. For example, a company may have inbound payments from customers that have not yet cleared, but need immediate cash to pay its employees. But when a company borrows from the primary capital markets, often the purpose is to invest in additional physical [[capital good]]s, which will be used to help increase its income. It can take many months or years before the investment generates sufficient return to pay back its cost, and hence the finance is long term.<ref name = "CapDev"/>

Together, money markets and capital markets form the [[financial market]]s, as the term is narrowly understood.{{efn|Note however that the term "financial markets" is also often used to refer all the different sorts of markets in the financial sector, including those that are not directly concerned with raising finance, such as [[commodity market]]s and [[Forex|foreign exchange]].}} The capital market is concerned with long-term finance. In the widest sense, it consists of a series of channels through which the savings of individuals and institutions are made available for industrial and commercial enterprises and public authorities. This process of channeling savings into productive investments is crucial for economic growth and development. Moreover, capital markets provide opportunities for both individuals and institutions to diversify their investments, thereby managing risk and potentially enhancing returns over the long term.<ref>{{Cite journal |last1=Houston |first1=Joel |last2=James |first2=Christopher |last3=Maarcus |first3=David |date=1997 |title=Capital market frictions and the role of internal capital markets in banking |url=https://doi.org/10.1016/S0304-405X(97)81511-5 |journal=Journal of Financial Economics |volume=46 |issue=2 |pages=135–164|doi=10.1016/S0304-405X(97)81511-5 }}</ref>