Importance of Capital Market. Market Functions. 21 It is only with the help of capital market, long-term funds are raised by the business community. Functions. The long-term funds or fixed capital are raised by companies by the issue of shares, debentures and bonds in the capital market. If you own a business, you probably know it is subject to a cornucopia of laws. Capital market plays an important role in mobilising resources, and diverting them in productive channels. The year 1933 saw two important pieces of legislation pass through Congress. The net effects of the experience of market-based policies and deregulation surely has been and will continue to be positive. The Glass-Steagall Act was established to keep banks from tying themselves up in the stock market … In this way, it facilitates and promotes the process of economic growth in the country. Robert Kolb, author of the book "Lessons from the Financial Crisis," is one of many who purport the mortgage meltdown of 2008 was largely because of the government's lack of oversight. The place can be a market place or a street market. Definition of Capital Market 2. The market function is there so that the satisfaction of the buyers and sellers during a transaction can be ensured.. When they work well, democratic governments make laws to protect people from harmful things that they cannot prevent on their own. The Role of Regulatory Agencies. In order to understand the Meaning of Market the market function is an important issue to delve into. The system consists of savers, intermediaries, instruments and the ultimate user of funds. Definition of Capital Market: Capital market is an organised market mechanism for effective and efficient transfer of money capital or financial resources from the investing class to the entrepreneur class in the private and public sectors of the economy. Regulation, however, is sometimes insufficient in preventing a financial market crash. Objectives of Capital Market 3. This is the basic role of good government, yet the American public hears a constant drumbeat of anti-regulatory messages from conservative politicians and think tanks and influential business organizations like the U.S. Chamber of Commerce. The level of economic growth largely depends upon and is facilitated by the state of financial system prevailing in the economy. Importance 4. 2. An agency has quasi-legislative functions, executive functions, and judicial functions. The functions and regulations of financial institutions have changed since our most recent recession and will likely continue to be governed at a higher level going forward. A financial system is a network of financial institutions, financial markets, financial instruments and financial services to facilitate the transfer of funds. 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