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The capital market is both direct and indirect. However, in the US, most financing through the capital market is done via indirect finance. This financing is done through intermediaries who tend to substitute their credit for the credit of the borrower. It is estimated that the total credit raised annually in the US amounts to $2,200 billion of which equity instruments amount to $200 billion while debt instruments account for the remaining $2,000 billion.
A lot of comparison of capital market and commercial banks has been done because many people feel they are similar. In the US, commercial banks offer ease of access to bank credit. There is less government intervention, low market concentration and foreign banks are allowed to enter the commercial financing arena. Basically, when comparison of capital market and commercial banks is done, it is found that the commercial banking sector is well developed, profitable and efficient.
It is widely recognized that commercial banks play an important role in promoting growth. The commercial banking sector is strongly associated with higher growth rates and the banks tend to promote efficiency in allocating investments and thus contributing to productivity growth. Many commercial banks also tend to be active in the capital market as they have liquid and active equity.
When comparison of capital market and commercial banks is done, it is seen that commercial banks tend to promote corporate governance and mitigate the adverse effects of financial shocks.
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The history of banking is quite interesting. Many people might not know this but the first banks were established in ancient times. These were established during the third millennium and were actually religious temples. This was well before the invention of money and deposits were in the form of grain, cattle, agricultural implements and precious metals particularly gold. There are records in existence of loans made by temple monks to merchants in Babylon in the 18th century BC. 
