Understanding how the global capital market is evolving is essential for businesses, financial institutions, policy makers, and investors. Our proprietary capital markets databases allow us to map the world’s financial assets and analyze capital flows and analyze other developments, including the growth of sovereign wealth funds and other "new power brokers" and the rise in debt and potential for deleveraging.
Debt and deleveraging: The global credit bubble and its economic consequences The recent bursting of the great global credit bubble has left a large burden of debt weighing on many households, businesses, and governments, as well as on the broader prospects for economic recovery in countries around the world. Leverage levels are still very high in ten sectors of five major economies. If history is a guide, one would expect many years of debt reduction in these sectors, which would exert a significant drag on GDP growth. Read more
An exorbitant privilege? Implications of reserve currencies for competitiveness Observers assume that the United States enjoys an "exorbitant privilege" because the dollar is the global reserve currency. But MGI finds that in 2007/8, the United States gained a net benefit of just $40 billion to $70 billion—0.3 to 0.5 percent of US GDP. In the "crisis year" to June 2009, the benefit fell to between -$5 billion and $25 billion. Given this, could the United States prioritize domestic growth and jobs over its global responsibilities, sparking greater currency volatility that threatens competitiveness? Read the discussion paper Read a series of essays and join the debate on the future of the dollar on What Matters
Global capital markets: Entering a new era
World financial assets fell by $16 trillion to $178 trillion in 2008, marking the largest setback on record and a break in the three-decade-long expansion of global capital markets. Looking ahead, mature financial markets may be headed for slower growth, while emerging markets will likely account for an increasing share of global asset growth.
The new power brokers: How oil, Asia, hedge funds, and private equity are faring in the financial crisis
The power brokers collective performance in the financial crisis, though better than the sharp declines in wealth of most institutional investors, masks an important shift: Asian sovereign and petrodollar investors emerged as more influential than ever, while hedge funds and private equity saw their previously rapid growth interrupted.
Will U.S. consumer debt reduction cripple the recovery?
U.S. consumers are spending less and saving more. Unless incomes grow faster, each percentage point increase in the saving rate would reduce spending by more than $100 billion—a serious drag on any recovery.
As consumers batten down the hatches and the global economy slows, senior executives confront a more profoundly uncertain business environment than most of them have ever faced. Companies that nurture flexibility, awareness, and resiliency are more likely to survive the crisis, and even prosper.
The new power brokers: Gaining clout in turbulent markets
Four new power brokers—Asian sovereign investors, petrodollars, hedge funds, and private equity firms—have grown in size and clout during the financial crisis that began in mid–2007. The crisis underscored one of the biggest benefits offered by the power brokers: vast pools of liquidity. Yet risks remain.
Between 2007 and 2020, the member states of the Gulf Cooperation Council will earn $5 trillion to $9 trillion from exports of crude oil. Depending on oil prices and levels of domestic investment, 30 to 60 percent of this windfall could flow into overseas capital markets.
Mapping global capital markets: Fifth annual report
The world's financial assets rose to $196 trillion in 2007, slightly below the pace of 2006 but still faster than the historical trend-likely marking the recent peak for equity and private debt markets.
Mapping global capital Markets: Fourth annual report
MGI's analysis highlights trends in the global financial markets across countries, regions, and asset classes. It finds assets reached $167 trillion in 2006, while capital flows climbed to a record $8.2 trillion.
At an oil price of $70 a barrel, the six nations of the Gulf Cooperation Council would earn a cumulative $6.2 trillion by 2020, or more than triple the amount they earned from 1993 through 2006. Decisions by Gulf leaders on how to use this wealth will have global repercussions for decades.
Mapping the global capital markets third annual report
MGI's third analysis highlights trends in the global financial markets across countries, regions, and asset classes. It finds assets reached $140 trillion in 2005 and, for the first time, provides a detailed look at cross-border capital flows.
A shift is under way in the world's financial structure thanks to the growing importance of oil investors, Asian central banks, hedge funds, and private equity. A chart-driven article examines the rise of these new power brokers.
The new power brokers: How oil, Asia, hedge funds, and private equity are shaping global capital markets
Even under conservative scenarios, the assets of the new power brokers—petrodollars, Asian central banks, hedge funds, and private equity—will nearly double to $15.2 trillion in 2012.
The U.S. imbalancing act: Can the current account deficit continue?
The U.S. current account deficit could continue to grow over the next five years. However, to reverse the deficit by 2012, a massive dollar depreciation would be required.
What businesses need to know about the U.S. current account deficit
The U.S. "im-balancing" act could continue for some time, but any correction would have surprising consequences. Governments and businesses should prepare for them.
Fulfilling the potential of Latin America's financial systems
Although the region's financial depth is low, Latin America could be on the verge of a breakthrough if policy makers continue reducing public debt and reforming the financial and legal systems.
Accelerating India's growth through financial system reform
Addressing the inefficiencies in India's financial system could free up $48 billion of capital a year and raise the country's real GDP growth to 9.4 percent a year.
China and India's financial systems: A barrier to growth
This article looks at the need to reduce government interference in the financial systems of India and China and strengthen market orientation in order to evolve these systems.
Mapping the global capital market second annual report
MGI's updated analysis highlights trends in the global financial stock across countries, regions, and asset classes and shows that it continues to grow apace totaling more than $136 trillion and set to exceed $228 trillion by 2010. Much of this growth is driven by debt.
The coming demographic deficit: How aging populations will reduce global savings
Over the next two decades, absent dramatic changes in saving behavior or returns earned on financial assets, growth in household financial wealth will slow by more than two-thirds. Today’s choices will ultimately determine how the world economy adjusts to an older population.
$118 trillion and counting: Taking stock of the world's capital markets
An analysis of the financial assets of more than 100 countries reveals that the global capital market continues to grow, integrate, and become more liquid as the roles countries and regions play within it are changing.
To finance economic growth, India's financial system must mobilize savings more effectively—a goal that calls for reducing the government's fiscal deficit, which crowds out private investment, and for reforming banks and capital markets.
Significant differences in capital productivity exist across nations. This report suggests that U.S. capital productivity exceeds Germany's and Japan's because managers in the U.S. have greater incentives and face stronger market pressures.
The global capital market: Supply, demand, pricing, and allocation
This report suggests that a global capital market is forming, one that moves capital efficiently across national borders to meet demand in other parts of the world. Our research indicates potential for a "coincidence of needs" between developed and developing economies that can promote prosperity for both.
McKinsey conversation Authors Susan Lund and Charles Roxburgh examine how the crisis rolled through the global financial system—and discuss the implications for the future Listen to the podcast
A new era for global capital markets The full ramifications of the crisis will take years to play out, but it is already clear that the financial landscape has shifted in several ways. View slideshow
New power brokers The global financial crisis and recession have altered the paths of four influential groups of investors: oil exporters, Asian sovereign investors, hedge funds and private equity. View slideshow
The New Power Brokers: Video Q&A In a video interview, MGI's director Diana Farrell answers questions about the "new power brokers" Launch video
McKinsey conversation Listen to a moderated conversation between MGI's Diana Farrell and Kito de Boer, a director in McKinsey's Dubai office, as they discuss the implications of the coming oil windfall in the Gulf for global capital markets.
Listen to the podcast
Slideshow An on-line slide show gives an overview of the size, impact, and growth of the new power brokers.
Read more
Interactive exhibit Explore the findings of MGI's research on China's financial system, how the system's performance stacks up, and the value of further reform. Read more
Explore MGI multimedia Gain MGI insights through interactive graphics, podcasts, and other media. Read more
Get and manage periodic research update e-newsletter and alerts. Read more
Get RSS feed and Podcasts.
Free, onetime registration is required to download MGI publications. Register now
