Global Competition of Stock Exchange Term Paper

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The Toronto Stock Exchange has long attracted issuers in the mining industry because the level of investor knowledge of this sector has traditionally been higher in Canada. Thus, the TSX has a competitive advantage in attracting new mining issues since those types of companies find it easier to raise capital there than on most other exchanges.

Another major point of competition is the investment banking sector. Firms often choose their exchange based on their ability to raise capital. This requires a strong investment banking sector, and a market in which a broad range of institutional investors participates. This increases the pool of available capital as well as overall market liquidity.

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For example, London Stock Exchange Chairman Chris Gibson-Smith outlined the need for European capital markets to integrate in order that their liquidity and capital-raising ability match that of the U.S.

Each of the world's major capital markets has recognized the paradigm shift from national-based markets to global capital markets that stems from free movement of global cash flows. The world's major exchanges are actively competing for capital, based on liquidity, legislative environment, exchange structure and local expertise. As global restrictions on capital flows continue to fall, this competition will increase in intensity.

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https://www.aceyourpaper.com/essays/global-competition-stock-exchange-29199