What is a capital market, and what separates a large one from a small one?

In 1815 the Swedish state unilaterally wrote off most of its foreign debt.⁹ Three quarters of the national debt had then been borrowed abroad.⁹ The last third of the national debt was paid later, and the Swedish province of Pomerania was pledged against payment in silver.⁹ By 1834 the national debt had been more or less wiped out.⁹ The Swedish National Debt Office, founded in 1789, describes this event itself on its website.⁹

From 1840 and into the 20th century, the Debt Office instead borrowed by issuing bonds abroad, and a large part of the money was lent on short term to Swedish banks.⁹ The Debt Office states that this was the beginning of the Swedish money market.⁹ In 1897 the Swedish Parliament decided that the Riksbank alone would be allowed to issue banknotes, and the decision took effect at the start of 1904.²² Only then could the bank conduct monetary policy in the modern sense.

This article goes through what a capital market consists of, how the Swedish one is built layer by layer, and what measurably separates a large market from a small one. There are no return figures, and no assessments of individual markets.

Two halves and two steps

A capital market has two halves. On the equity side, a company sells shares of itself, and the buyer becomes a part owner. On the debt side, a company, a municipality or a state borrows money against a promise to pay it back with interest, and the buyer becomes a lender. The relative size of the two sides depends on which markets and securities are counted, which often surprises people.

The market also has two steps. On the primary market the security is issued for the first time, and the money goes to whoever issues it. On the secondary market the same security changes hands between investors, and no money goes to the company or the state. The trading you see in the news is almost entirely the second kind.

Four layers

Beneath that trading lie four layers. The marketplace, registration and settlement, and supervision carry organised trading, and for some transactions a central counterparty is added.

The first is the marketplace, the place where buyers and sellers meet. It can be a regulated market, in everyday speech a stock exchange, or a trading platform with lighter rules.^{7, 30} The second is the central securities depository, which keeps the register of who owns what.³² The third is the central counterparty, which steps in between buyer and seller so that neither needs to trust the other.³³ The fourth is supervision, which in Sweden is carried out by the Swedish Financial Supervisory Authority (Finansinspektionen).⁷

Counted in units, the Swedish infrastructure is small. The authority's company register shows two exchanges, two regulated markets, three trading platforms, one central securities depository, one central counterparty and two clearing organisations.^{7, 30} Alongside them there are 122 investment firms that pass on orders and manage capital.^{7, 30}

The third and fourth layers are invisible to the person trading, and that is the point. A central counterparty takes over the counterparty risk from both sides, so that a trade does not depend on the other party being able to pay.³³ A central securities depository makes ownership an entry in a register instead of a paper in a safe deposit box, which is why a trade can take seconds.³²

What separates a large market from a small one

The number of listed companies is the first measure, and it easily misleads. In June 2026, 922 companies were listed on Swedish marketplaces.¹ Of them, 378 were on a regulated market and 544 on a trading platform, 41.0% and 59.0% respectively.¹

The value, and the size against the economy

The market value is spread completely differently. The shares in the 922 companies were worth 13,515,619 million kronor, and 98.2% of that value was on a regulated market.² The trading platforms, where six in ten companies are listed, held 1.8%.^{1, 2} The largest exchange segment alone held 137 companies, 14.9% of the number, and 92.2% of the value.^{1, 2}

So size is measured in two dimensions at once. Against the economy, the Swedish stock market value equalled 199.2% of gross domestic product, measured against the four quarters up to and including the second quarter of 2026.^{2, 6} That is our own division. The World Bank counts in a different way, with the value at the end of the year and without investment funds and pure holding companies, and gives 148.5% for the world as a whole in 2025, when 53,087 domestic companies were listed in the world.^{15, 26, 27} The World Bank publishes no figure for Sweden.

The spread between exchanges and participants

The spread between individual exchanges is large. Of the 85 exchanges that reported their number of listed companies to the World Federation of Exchanges for 2025, the smallest had 9 companies and the largest 5,960.^{14, 25} The median was 162.^{14, 25} Thirty-three exchanges had fewer than 100 listed companies, and sixteen had at least 1,000.^{14, 25} Another measure is how much is actually traded: in the Nordic and Baltic exchange group, domestic shares were traded for an amount equal to 35.3% of the market value during 2025.^{14, 25}

A third measure is how many actually trade. In the Nordic and Baltic exchange group there were 93 trading participants on the equity market in 2025, 61 on the bond market and 63 on the derivatives market.^{14, 25} It is normal for the number of participants to be small compared with the number of listed companies: trading goes through a few members who in turn pass on orders from everyone else.

The debt side, and who actually borrows

Outstanding debt securities issued by Swedish issuers amounted to 9,510,816 million kronor in June 2026, or 140.2% of gross domestic product.^{5, 6} Anyone who guesses that the state is the largest borrower guesses wrong.

Monetary financial institutions other than the Riksbank accounted for 5,790,189 million kronor, or 60.9% of everything outstanding.⁵ The group includes banks and other credit institutions. Of that, 2,676,208 million were covered bonds, bonds backed by mortgages.⁵ The Swedish state accounted for 1,190,373 million, or 12.5%.⁵ Non-financial companies accounted for 16.2% and municipalities and regions for 3.2%.⁵

The Riksbank describes the covered bonds as roughly as large as all outstanding government bonds and corporate bonds together, and as equal to almost 40% of Sweden's gross domestic product.¹² The national debt itself was 1,249,558,872,203 kronor on 31 August 2026, and the Debt Office has agreements with five dealers who have committed both to bid at every auction and to quote buying and selling prices on the secondary market.^{10, 11, 21}

The debt figures can be checked against an independent source. The Bank for International Settlements reports outstanding debt securities issued by Swedish issuers at 8,724 billion kronor in nominal value at the end of 2025.^{16, 28} Compared with Statistics Sweden's figure for the same date, excluding the Riksbank's own issues, the two measurements differ by 0.09%.^{5, 28}

Who decides that a market is emerging

The terms developed market and emerging market sound official, but they are set by private index providers according to their own criteria. The two providers this article follows both publish their rules openly, and the criteria differ.^{17, 18}

Two providers, two lists of criteria

For a developed market, one of them requires gross national income per inhabitant to be 25% above the World Bank's high income threshold for three years in a row.¹⁷ With the threshold of 13,935 dollars for 2024, the bar becomes 17,418.75 dollars.¹⁷ On top of that come size requirements and an assessment of accessibility in five criteria and eighteen sub-measures.^{17, 29} Sweden has the top rating on all eighteen in the review with data as of 31 May 2026.²⁹ In June 2026 the provider assessed 80 markets and placed 23 as developed, 25 as emerging, 21 as frontier markets and 12 as standalone.²⁹ The total comes to 81 because China is assessed as two markets in the review.

The other uses a matrix of 22 ticked criteria.¹⁸ A developed market must meet all 22, an advanced emerging market 16, a secondary emerging market 9 and a frontier market 5.¹⁸ The size thresholds are built so that the exit threshold is exactly half the entry threshold.¹⁸ In April 2026 it classed 25 markets as developed, 10 as advanced emerging, 13 as secondary emerging and 30 as frontier markets.¹⁸

What the label does and does not decide

The fact that the criteria differ has consequences. South Korea and Poland count as developed markets for one provider and as emerging for the other.^{18, 29} The second provider's system is also younger than it sounds. It grew out of an index that in 1987 covered 23 countries with no split at all.¹⁸ The split into developed and emerging was made in 2000, the formal scheme was brought into use in 2004 and frontier markets were introduced in 2008.¹⁸

Regulation is a different thing from classification. The International Organization of Securities Commissions, formed in 1983, has more than 200 members that together regulate more than 99% of the world's securities and derivatives markets in more than 130 jurisdictions.¹⁹ Its largest committee is the one for growth and emerging markets.¹⁹

Sweden did not meet today's openness requirement until 1993

One of the criteria for a developed market is that foreign investors may own freely.¹⁷ That did not apply to Sweden until fairly recently.

Until the turn of the year 1992, Swedish limited companies could have so-called foreigner clauses in their articles of association, which divided the shares into restricted and free shares.^{13, 23} Foreign buyers were normally allowed to acquire less than 40% of the share capital and less than 20% of the votes.^{23, 24} The Companies Committee (Aktiebolagskommittén) found such clauses in just over 220,000 Swedish limited companies, about 80% of all of them.^{13, 23} In the autumn of 1991 they were in 188 of 212 listed companies.²³ In the 173 companies that had both types of share, the free shares made up on average 21% of the shares, and the same company's share could have two different prices.²³

The rules were repealed on 1 January 1993, and existing clauses lapsed automatically when the change took effect.¹³ The change was mainly a result of Sweden's commitments under the Agreement on the European Economic Area.¹³

Who owns

The pattern of ownership can be read directly from the statistics. In June 2026, foreign owners held 37.7% of the capital in Swedish listed companies but only 32.7% of the votes.³ The difference arises because Swedish companies often have share classes with different voting power.³ In December 1999, almost seven years after the restricted shares were abolished, the figures were 39.0% of the capital and 17.7% of the votes.^{3, 13}

Households held 11.7% of the capital and 11.2% of the votes.³ Investment funds held 13.2% of the capital, and investment companies 8.8% of the capital but 10.5% of the votes.³

The number of Swedes who own shares directly has fallen over twenty years.⁴ In December 2006, 19.5% of the population directly owned shares in companies listed on a Swedish marketplace.⁴ In December 2016 the share was 13.5%, and in June 2026 it was 9.1%, split between 6.1% of women and 12.1% of men.⁴ Owning through a fund is not counted in that figure.

What the figures do not say

The number of listed companies does not only go up. It rose from 456 in December 2006 to 1,047 in June 2022 and has fallen every half year since then, to 967 in December 2024, 935 in December 2025 and 922 in June 2026.¹ Against the population, that is 87.1 listed companies per million inhabitants, a figure that mixes dates because the population refers to 31 December 2024.^{1, 20}

The infrastructure is changing too, on dates that are already set. Within the EU, the time between trade and settlement will be shortened from two days to one, starting on 11 October 2027.^{8, 31} It is the kind of change no investor notices and that the whole market has to rebuild for.

And the words developed and emerging describe how the market is built, not the country's economy and nothing about what is wise to do. They are set by private providers according to criteria they decide and change themselves.^{17, 18} Sweden was in the developed group from the moment the split was introduced, but did not meet today's openness criterion until 1993.^{13, 18, 23}

All episodes in this area are at Season 5, Emerging Global Wealth.

What to take away

In June 2026, 922 companies were listed on Swedish marketplaces, 378 on a regulated market and 544 on a trading platform, and 98.2% of the market value was in the regulated part.^{1, 2} Outstanding debt securities from Swedish issuers amounted to 9,510,816 million kronor, or 140.2% of gross domestic product, where banks and other credit institutions accounted for 60.9% and the state for 12.5%.^{5, 6} The structure changes slowly and in layers: the share of Swedes who directly owned shares went from 19.5% in December 2006 to 9.1% in June 2026.⁴ Follow the number of listed companies and the split of ownership in Statistics Sweden's shareholder statistics,^{1, 3, 4} the outstanding debt amount by group of issuers⁵ and the exchange statistics from the World Federation of Exchanges.^{14, 25}

Education, not advice.