About this report

The Covid-19 crisis marked an unprecedented event in the history of economic and financial crises. While financial market regulators and policymakers were able to react quickly to the emerging signs of stress in market disruptions and manage financial stability risks and investor protection during the crisis, the highly disruptive effects of the pandemic will likely lead to several enduring shifts which will shape the “new norm” for our economy and society.

This presents an opportunity for the capital market sector to redefine its role for the future. However, there is much that needs to be done to narrow the structural gaps in transitioning to a more “market-based” financing system, while mitigating the negative impact of Covid-19.

Among the key prerequisites for developing the capital market sector to be more future-ready, investment in digital innovations and talent development strategies coupled with a facilitative regulatory framework are identified as critical enablers. Given the fast evolution of technology applications in the sector, there has been an increased focus of policy development on the more tangible factors of production such as facilitating digital innovations in the sector. While critical for the development of the sector, digital technology by itself cannot create sufficient competitive advantage if the development of the sector is constrained by a more intangible form of “intrinsic capital” i.e., the human capital assets or talent within the industry, which is as, if not more critical to unlocking new growth opportunities and ensuring long-term sustainability of the overall sector.

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