Until the 1960s, there was no such thing as the international securities market. Securities markets were based in a single country and virtually all primary market new issues and secondary market transactions were undertaken by companies, investment institutions and individuals resident in that country. In consequence, securities firms (except those in London) dealt only in domestic securities and were unlikely to have overseas branches or subsidiaries.

Governments gave no special consideration to selling bonds to foreign investors since there was no reason to believe that this would reduce the cost of government funding. Indeed, it was more likely to raise it since enticing foreigners into a distant market where information was slow to reach them would require the payment of a premium return. For securities firms, there was little reason to consider overseas branches or subsidiaries since their customers undertook so little overseas business. To the extent that they did, this could be undertaken through commission sharing agreements with, for example, overseas stockbrokers.

The change during the 1970s and 1980s from a domestic perspective on the part of issuers, investors and securities houses, to a global cross-border perspective, arose for a number of reasons. Companies became more multinational in their operations, and consequently investors started to appreciate the advantages of global diversification. Telecommunications systems improved and costs fell; screen-based systems were developed to disseminate information globally. Computing power also fell in cost and allowed easy analysis of information. At the same time, rising government deficits (particularly in the USA) could only be financed at an acceptable cost by widening the investor base to include foreign investors, while the gradual worldwide abolition of exchange controls facilitated cross-border transactions.

By the beginning of the 1990s, there had developed an international financial mechanism comprising internationally oriented investors, global securities houses and market mechanisms facilitating cross-border securities transactions. By the year 2000, it is likely that this mechanism will be greatly refined and will be the major source of funding for international companies, governments and quasi-government bodies.