Both money and capital markets are key components of international finance markets. Both markets allow investors to buy debt securities, which are financial products that an actor purchases and the issuer promises to pay back, such as bonds. Capital markets also sell other types of securities and money markets specializes in short-term debt.
Capital Markets
Capital markets are any financial market or exchange that trades in financial products, such as stocks -- the main equity security -- and bonds -- the main debt security -- as well as other products, such as futures and options contracts.
Money Market
The money market focuses on short-term debt. Short-term debt means financial products -- bonds, loans, promissory notes -- that the issuer will pay back within 52 weeks. Much of the debt traded on capital markets has even shorter periods, like overnight bank loans or Treasury bills that mature in a matter of weeks.
Similarities
Both types of markets move billions of dollars a day, making them extremely important in the global economy. Businesses and governments rely on both markets to raise money to pay for operations or expand activities. Furthermore, both markets are largely intangible. Most of the trading occurs through computerized trading platforms, not in physical market places or exchanges. While the floor of the New York Stock Exchange is the icon of the capital market, the number of traders on its floor decrease every year and the CEO of NASDAQ has called it a relic.
Differences
Capital markets trade in both debt and equity, which is ownership investment, such as stocks. While both capital markets and the money market restrict who can trade directly, the money market is the near exclusive realm of very large institutions, banks and governments, while individuals can gain access to capital markets by opening a brokerage account.