The Global Risks Alliance (GRA)
Capital-markets systems, information, infrastructure and cross-market financial risk. Capital Markets Nexus is an established platform published by The Global Risks Alliance.
Fig.The Nexus cycle on this platform, from question to renewal. Design, not a record of a run.
Capital markets risk is the risk of loss or disruption in the markets where securities are issued, traded, cleared and settled, from price and credit moves to liquidity spirals, infrastructure failure and misconduct. Capital Markets Nexus, The Global Risks Alliance's platform for the sector, explains how markets price, transfer and concentrate risk; it gives no investment or trading advice.
Capital market professionals; analysts; market infrastructure specialists.
Market structure; volatility; liquidity; risk propagation.
Market-risk analysis; infrastructure resilience research.
The working screen behind this platform: its structure, terms and states. Names are placeholders and values illustrative.
Bond market · Session 2
vs largest two members' default, illustrative
| Settlement fails | 84 | ▲ 16 | Normal |
| Margin calls intraday | 9 | ▲ 4 | Elevated |
| Surveillance alerts | 136 | ▼ 1 | Triage |
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
Market instruments and exposure types.
TopicDislocation and funding stress.
TopicCentral counterparties and operations.
TopicIntegrity, disclosures and sources.
TopicIntermediaries, holdings and interconnectedness.
TopicCross-border exposures and market response.
TopicAI and tokenization risks.
TopicTransparency and professional boundaries.
The platform does not set standards. It reads its evidence against the frameworks that competent bodies have adopted, so a finding can be placed where a decision-maker already works.
| Framework or standard | Body | What it sets |
|---|---|---|
| IOSCO Objectives and Principles of Securities Regulation | International Organization of Securities Commissions | Principles for regulators, issuers, collective investment schemes, intermediaries, secondary markets and clearing and settlement, with an assessment methodology |
| Principles for Financial Market Infrastructures | CPMI and IOSCO | Standards for central counterparties, securities settlement systems, central securities depositories, payment systems and trade repositories, with public quantitative disclosure standards |
| MiFID II and MiFIR | European Union, applied by ESMA and national competent authorities | Trading venue structure, pre-trade and post-trade transparency, transaction reporting, best execution, algorithmic trading controls and investor protection |
| EMIR and Dodd-Frank Act Title VII | European Union; US CFTC and SEC | Clearing obligations, margin for uncleared derivatives, trade repository reporting and supervision of derivatives market participants |
| Policy recommendations on non-bank financial intermediation | Financial Stability Board | Liquidity mismatch in open-ended funds, money market fund resilience, margining practices and non-bank leverage |
| IFRS S1 and IFRS S2 | International Sustainability Standards Board, IFRS Foundation | General sustainability-related and climate-related financial disclosures by issuers for investors |
| Market Abuse Regulation and US anti-fraud and anti-manipulation rules | European Union; US SEC and CFTC | Prohibitions on insider dealing, unlawful disclosure and manipulation, with surveillance and suspicious order reporting duties |
| ISO 10962 Classification of Financial Instruments and ISO 6166 ISIN | International Organization for Standardization | Codes that classify and identify securities and derivatives across venues, reports and jurisdictions |
| ISO 17442 Legal Entity Identifier | ISO, with the Global LEI System overseen by the LEI Regulatory Oversight Committee | A unique identifier for legal entities in financial transactions, with reference and parent relationship data |
| Critical data elements, UTI and UPI technical guidance | CPMI and IOSCO | Harmonised definitions and identifiers for OTC derivatives transaction reporting so trade repository data can be aggregated |
Capital markets turn savings into long-term investment, let firms and governments raise funds, allow risk to be transferred and produce the prices that guide decisions across the economy. Their resilience matters far beyond the firms that operate in them.
Who provides liquidity, where trading happens and how market structure changes behaviour under stress.
The plumbing that turns trades into transfers, and the information that prices depend on.
Leverage, collateral, common exposures and correlated strategies that carry stress between markets.
Under normal conditions, markets look deep and continuous. Under stress, liquidity can vanish: dealers step back, margin calls force sales, funding markets tighten and prices move further than fundamentals justify. Episodes such as the global financial crisis, the market turmoil at the start of the pandemic and sharp moves in government bond markets have shown how quickly stress travels from one market to another through common holdings, leverage, collateral and the infrastructure that connects them.
The system has become more interconnected and, in places, more concentrated. Central counterparties clear large volumes of derivatives and repo; a small number of index providers, data vendors, custodians and cloud services sit beneath many firms; passive and systematic strategies can cause many investors to move in the same direction. Digital assets, tokenization and artificial intelligence add new instruments and new correlations. Real-economy shocks, from wars and sanctions to climate events and cyber incidents, reach markets through all of these channels.
The industry problem is shared understanding: how structure, information and infrastructure shape the way risk propagates, so that participants, infrastructures and authorities can each act on a common factual base.
The platform's methods are the analysis of market structure, volatility, liquidity and risk propagation. It is designed to publish market-risk analysis and infrastructure resilience research that firms, infrastructures and public authorities can examine and use.
Capital market professionals, analysts and market infrastructure specialists, with risk managers, researchers and supervisors as readers.
Market microstructure, econometric analysis of liquidity and volatility, network models of exposure and scenario analysis, each with stated limits.
Market-risk analysis and infrastructure resilience research, at sector level and in aggregated form.
GRA is a nonprofit business league for the financial services industry. It does not lend, underwrite, rate, invest, advise on or arrange transactions, introduce counterparties or take transaction-based pay, and readiness work is not approval.
The platform applies financial economics and macro-finance, network science and contagion, payment and financial market technology, econometrics and distributed ledgers and digital assets; see the STEM foundation of Capital Markets Nexus. Its governance counterpart is Capital Nexus at The Global Risks Forum (GRF), which convenes on capital and finance governance. Within GRA it works alongside Payments and Market Infrastructure, Financial Stability, Asset Management Nexus and Fintech Nexus.
Field gateways: Capital markets and investment and Financial stability. Network methods are shared with Systems Science and Modelling at The Global Centre for Risk and Innovation (GCRI).
Capital Markets Nexus studies how capital markets price, transfer and concentrate risk: the equity and bond markets where securities are issued and traded, the funding and derivatives markets that connect them, the central counterparties and settlement systems that make trades final, and the data and conduct rules that keep prices informative. Its pages set out mechanisms, measures, sources and the institutions that hold each decision. As the financial-sector view of The Global Risks Alliance, they describe shared industry understanding, not investment advice.
Equities, government and corporate bonds and the exposure types they carry: duration, credit, equity and currency risk.
How the ability to trade and to fund positions erodes under stress, and how dislocation spreads from one market to the next.
Central counterparties, securities settlement systems and the margin, default and recovery arrangements that make trades final.
Reference data, trade reporting, issuer disclosure and the identifiers that make market records comparable and auditable.
Dealers, asset managers, custodians and clearing members whose size and links shape how a shock travels.
Sanctions, capital flows, currency funding and foreign holdings through which geopolitical events reach markets.
Algorithmic and AI-driven trading, tokenised securities, stablecoins and the operational dependencies they add to market structure.
Market abuse, transparency obligations, conflicts of interest and the professional boundaries that protect price formation.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Market liquidity | The ability to trade a meaningful amount of an asset quickly without moving its price much. |
| Funding liquidity | The ability to finance a position or meet a margin call when due. |
| Central counterparty | An entity that becomes buyer to every seller and seller to every buyer in cleared trades, collecting margin and mutualising default losses. |
| Market abuse | Insider dealing, unlawful disclosure of inside information and market manipulation, as the EU Market Abuse Regulation defines it. |
Every claim on Capital Markets Nexus rests on methods with a canonical page in the STEM Commons, so readers can see what a finding depends on and where its limits lie.
A question becomes evidence, a governed build, an organized community, a controlled test, a reviewed publication and, finally, a decision taken by the competent authority under its own rules.
GCRI studies a field as science, GRF governs it and GRA builds shared financial understanding of it. Capital Markets Nexus links to its counterparts so that work on one side is visible on the others.
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.