I am looking for the total estimated value of all world capital
markets. It must come from a reputable (corporate, NGO, Govt) source,
and not from a random personal webpage.
On CNBC's Squawk Box morning show last week, there was a brief mention
that the estimated total value was appx. $300 trillion USD. However,
I have not been able to obtain a transcript or adequate documentation
that this amount is correct.
MANY THANKS!
Wow...what a chase! At first, this number had all the earmarks of an
"urban legend" -- a factoid repeated over and over (especially by
global conspiracy theorists), but which *never* came with a citation
pointing back to a credible source. It's not that the number seemed
grossly out of proportion -- world markets routinely trade in the
trillions of dollars -- but it just was hard to pin down the source of
the $300 trillion figure.
Hard...but not impossible!
I'll start with just a few of the various ways in which the $300
trillion figure was put to use...all without any citation whatsoever:
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http://www.iabc.nlc.net.au/iabcnews/299news3.htm
Asia Pacific specialist makes predictions for 1999-2001
"With global capital flows currently estimated at US$300 trillion
within a world economy currently estimated at only US$30 trillion,
managing and anticipating expectations and perceptions becomes almost
as important as managing economic fundamentals," he stated. "Should
capital flows be regulated and if so how can this be done practically
are now central questions."
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http://www.globalpolicy.org/finance/alternat/currtax/cur7_9b.htm
IMF Bailouts and Global Financial Flows
By David Felix
Foreign Policy
April, 1998
The surging financial flows have been predominately short-term. Over
80% of global foreign exchange (Forex) turnover-which exceeded $300
trillion in 1995 compared to only $4.6 trillion in 1977-involves round
trips of a week or less.
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Even Ambassador John Wolf, Asst. Secretary of State, put the figure to
use a few years back, without any mention of where it came from:
http://usinfo.state.gov/regional/ea/apec/wolf1022.htm
TEXT/TRANSCRIPT: APEC COORDINATOR WOLF 10/22 WORLDNET
(U.S. pursuing six goals for Vancouver APEC meeting)
October 22, 1997
AMB. WOLF: (In progress) -- quite neutralizing with this amazing new
technology. Sure the big company benefits, but the new company doesn't
have to face the barriers to access that it faces now that are in many
cases prohibitive. So I think it really is, as we come to understand
it, something that will benefit us all.
Now, when I was recently in Southeast Asia, I heard a number of people
who talked about the sort of continuum of goods and services on the
Internet, all the way across the financial transactions, the $300
trillion of financial transactions.
----------
The $300 trillion figure is one of the favorites of the proponents of
the "Tobin Tax", who have proposed that even a very small tax on
global capital flows would generate a huge sum of money that could be
put to public good (not a bad idea, if you ask me).
For instance:
http://www.cec-kek.org/English/North-Southpaper.htm
European Social Market Economy -an alternative model for
globalisation?
Every day on which the stock exchanges are open for business, over 1.5
trillion US dollars are sent around the globe. This corresponds to an
annual turnover of 300 trillion US dollars. Real economy financial
flows, i.e. trade and investments not related to speculative movements
amount, however, to just 2.5% of this gigantic sum.
-----
But where does the figure come from, you ask? Another Tobin Tax paper
gives a strong clue:
http://www.waronwant.org/?lid=1443
Global Gamblers: The destabilising foreign exchange market: who are
the winners from currency speculation?
7 August 2002
...The total figure for daily foreign exchange trading, including
derivatives,
can be estimated at $1,286 billion, or $308.6 trillion a year.17
The reference 17 cited for this figure is a report from the Bank for
International Settlements. With a bit more searching, I came up with:
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http://www.bis.org/publ/rpfx02.htm
Triennial Central Bank Survey of Foreign Exchange and Derivatives
Market Activity 2001 - Final Results
18 March 2002
The 2001 Triennial Central Bank Survey of Foreign Exchange and
Derivatives Market Activity - final results of which the BIS is
publishing today - shows a substantial decline in turnover in the
foreign exchange market and a slowdown in the growth of activity in
the derivatives market. In traditional foreign exchange markets,
average daily turnover in April 2001 was $1.2 trillion, a 19% decline
compared to April 1998. This decline contrasts with the findings of
previous surveys, which had reported a rapid rise in foreign exchange
market activity. In the derivatives market, average daily turnover was
$1.4 trillion, a 10% increase over the survey three years before. This
represented a significant slowdown in market expansion relative to the
earlier three-year period, when daily activity had expanded four times
faster. Additional data on the notional amounts of derivatives
contracts outstanding at end-June 2001 also show a slowdown in market
expansion relative to 1998.
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A footnote in the "Global Gamblers" report explains that they took the
daily turnover of capital flow ($1.27 or 1.4 trillion a day, depending
on which BIS report one references) and multiplied this by 240 trading
days per year, to reach a figure of somewhat in excess of $300
trillion per year...a figure which has become almost legendary.
----------
So there you have it...all before my second cup of coffee. Let me
know (through a Request for Clarification) if you would like any more
detailed explanation of anything I've written here.
Thanks again for a fun and challenging question.
Smstump-ga,
Would you be looking for something like this?
"A comprehensive new IMF tabulation of world capital market totals in
2001 allows some interesting comparisons to be made among major
economic zones and financing instruments. According to the IMF
estimates, the global stock market capitalization totaled $28.9
trillion that year, while outstanding public debt securities totaled
$22.2 trillion, private debt securities totaled $19.6 trillion, and
bank assets totaled $79.4 trillion, for a global capital market volume
of $150.1 trillion."
Thanks
--Bobbie7-ga
FABULOUS answer! Thank you SO much for this great answer. I am
usually a pretty damn good researcher, and was starting to doubt my
abilities. Of course, I am, admittedly, not much of a biz/econ person
so I didn't even consider that this could be urban legend. I just
kept looking for a pesky magic number! THANKS AGAIN!
Thanks for you kind words and generosity...always nice to hear from a
satisfied client. Hope we'll see you back at GA once day soon.
pafalafa-ga
I just wanted to restate that I am just looking for a very broad
estimate -- and not an exact number. Many thanks.
 I could use some help again...
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Estimated Value of All World Capital Markets