Well-functioning financial markets are fundamental to long-term economic growth and financial stability. They provide a platform to raise and allocate capital efficiently, manage risks, determine asset prices and inform investor decisions. Well-regulated financial markets foster investor confidence through transparency, fairness, and clearly defined rules of engagement.
The OECD’s work on financial markets aims to promote efficient market-orientated financial systems through sound policies for capital markets, sustainable finance, digital finance, public debt management, financial literacy and consumer protection, pensions, and insurance.
The integration of ESG factors in investment decisions is an important tool for managing climate and other sustainability risks and meeting society’s growing expectations for a more sustainable economy. Issues exist though around the lack of transparency and comparability of methodologies, and the efficiency of the metrics used in efficiently channelling capital towards ESG and climate goals.
Digital finance is revolutionising how people manage money, make payments and access loans. It is crucial for efficiency, inclusion and innovation. Policies must seek to harness these benefits while mitigating risks for financial stability, investor and consumer protection, and market integrity.
The OECD monitors the rapid evolution of digital finance, in particular AI in finance, to identify trends and developments and assess how these will interact with the conventional financial system and the implications for financial service providers, consumers and policy makers.
Enabling governments to access liquidity at all times at the lowest possible cost, while considering long-term risks, allows them to better support their economies and citizens. It also aims to enhance credibility, accountability and predictability, thereby contributing to greater market efficiency and lower borrowing costs.
The OECD provides guidance to public debt managers to help them achieve these objectives, which is more important than ever as fiscal pressures continue to rise against a backdrop of higher overall indebtedness.
Financial literacy and financial consumer protection are essential to empower and protect individuals. The OECD helps countries equip consumers with the knowledge and skills they need to navigate financial systems confidently and resiliently.
Access to pension systems for old-age security and insurance for disaster and accident protection are also essential. OECD work on asset-backed pension systems and insurance markets aims to ensure adequate retirement income and risk management, which are particularly important amid changing demographics and increasing climate disasters and cybersecurity threats.
At the end of 2023, the total volume of sovereign and corporate bond debt stood at almost USD 100 trillion, similar in size to global GDP. Total OECD government bond debt is projected to increase to USD 56 trillion in 2024, an increase of USD 30 trillion compared to 2008. At the end of 2023, global corporate bond debt reached USD 34 trillion and over 60 per cent of the increase since 2008 came from non-financial corporations.
At the end of 2023, the total amount of corporate and official-sector sustainable bonds outstanding totalled USD 4.3 trillion, up from USD 641 billion just five years prior.
This has made it a key source of funding for both governments and companies to accelerate their transition to a low-carbon economy. In the sustainable bond market, the corporate sector accounts for more than half of total issuance.
Financial literacy enables informed financial decisions vital for financial well-being. Understanding capital allocation, risk management, and fair practices also contributes to market integrity and can improve access to capital markets and sustainable finance. While most adults in 39 economies surveyed by the OECD in 2023 understand some financial definitions and calculations, they do not usually compare financial products across providers nor seek out advice from independent sources.
