SECURITIES ISSUED BY BANKS AND THEIR IMPACT ON THE STOCK MARKET

Abstract

This article examines the influence of securities issued by commercial banks on stock market development and performance. As financial intermediaries, banks play a vital role not only in the credit market but also as significant participants in capital markets through the issuance of various financial instruments such as bonds, depositary receipts, and structured products. The study analyzes empirical data from emerging and developed economies to determine how bank-issued securities contribute to stock market liquidity, investor confidence, and financial stability. The article highlights that, when properly regulated, the increased activity of banks in securities issuance enhances market depth and diversification. However, it also notes the potential risks of overexposure and systemic vulnerabilities if the process is not accompanied by prudent oversight. The research concludes with policy recommendations for improving transparency, regulatory frameworks, and market integration to ensure sustainable financial sector development.