Capital markets and investment
Capital markets reprice systemic risk continuously; the field's questions are whether physical, transition and nature risks are visible in disclosures and whether investors' shared models create correlated behaviour.
- 01In briefThe short answer
- 02Three mandatesThe field, seen three ways
- 03The systemic questionDisclosure, pricing and herding
- 04FrameworksDisclosure and scenario references
- 05CouplingsScience inputs to market understanding
- 06GroundingThe methods behind the field
- 07Key termsTerms used on this page
GCRI · Institution · service level R0
The short answer.
Capital markets and investment as a field covers how investors, asset managers and markets price, hold and transfer long-term risk, including climate, nature and systemic exposures. In the Nexus Consortium it is understood financially at GRA by Banking Nexus and Asset Management Nexus; this gateway links those platforms and the methods they share.
Financial centres and urban exposure in Oceania and the Pacific.
The cities where people, assets and financial activity concentrate, shown for Oceania and the Pacific as an example geography for this subject.
The field, seen three ways.
Science and evidence
No platform yet in this field.
Governance and dialogue
No platform yet in this field.
Financial understanding
Banking Nexus, Asset Management Nexus, Fintech Nexus, Capital Markets Nexus, Private Equity Nexus, Institutional Funds Nexus, Financial Regulation Nexus, Sovereign Capital Nexus, Financial Stability, Climate and Nature Financial Risk, Private Credit, Actuarial and Quantitative Risk
Disclosure, pricing and herding.
Disclosure standards have converged around the ISSB baseline, with TNFD for nature. Disclosure quality still depends on the physical and transition analysis behind it. Where many investors use the same data vendors and scenarios, repricing can be abrupt and correlated.
Disclosure and scenario references.
| Framework or body | What it governs or supplies |
|---|---|
| IFRS S1 and S2 (ISSB) | General sustainability and climate-related disclosure |
| TNFD recommendations | Nature-related disclosure |
| NGFS scenarios | Climate scenarios for central banks and supervisors |
Science inputs to market understanding.
GCRI's role is upstream: hazard, exposure and nature analysis, for example on Biodiversity Nexus and Climate and Hazards. Market understanding sits on GRA's platforms listed below. Nothing here is investment advice.
The methods behind the field.
- Financial economics and macro-finance
- Probability and statistics
- Network science and contagion
- Financial and risk engineering
- Artificial intelligence and machine learning
- Scenario design and stress testing
- Econometrics
- Payment and financial market technology
- Distributed ledgers and digital assets
- Cybersecurity and cryptography
- Digital identity and public digital systems
- Actuarial mathematics
- Decision analysis under uncertainty
- Policy, institutional and decision science
- Data engineering, interoperability and stewardship
- Game theory and mechanism design
- Economics and development economics
- Complex systems and agent-based modelling
- Climate and atmospheric science
- Ecology and biodiversity science
- Spatial statistics and geostatistics
- Extreme value theory and tail risk
- Uncertainty quantification and model validation
- High-performance, cloud and edge computing
Terms used on this page.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Liquidity mismatch | The gap between how quickly a fund promises to repay investors and how quickly it can sell its assets without loss. |
| Fintech | Technology-enabled innovation in financial services that can create new business models, applications, processes or products, as the FSB describes it. |
| Market liquidity | The ability to trade a meaningful amount of an asset quickly without moving its price much. |
| Stewardship | Investors' use of ownership rights and influence, through voting, engagement and escalation, to protect long-term value. |
Where this page's references lead.
The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.
Questions and answers.
Why does GCRI host field gateways?
Around GCRI.
Start with an enquiry.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.