For the second year in a row, Canada leads an annual ranking of entrepreneurial access to capital around the world, a California think tank said Monday.

The 2009 Miliken Institute Capital Access Index captures the data and analysis of the global capital markets in 2008, during one of the worst credit crunches for businesses since the Great Depression. The index helps businesses and entrepreneurs discern which countries’ capital markets have the most breadth, depth and vitality.

The report notes that the dramatic plunge in value of corporate bond issuance (down 60%) and the world equity market (down by half) had the expected result on industrialized nations. But while growth in emerging markets slowed, it did not sink. Emerging markets were better positioned than their U.S. and European counterparts because of larger market reserves, lower debt burdens and stronger growth rates, due in large part to increased internal demand.

Among the developed nations, first-place Canada continued to perform well. According to the report, it benefited from a stable housing market that was not as heavily securitized as that of the United States and from strict capital reserve requirements that kept money flowing to the private sector.

“Policymakers and financial leaders are debating the appropriate balance between growth and risk in financial regulation,” said Glenn Yago, Executive Director of Financial Research at the Milken Institute. “Canada’s financial-sector performance shows that there is a model out there that is working.”

The Top 10

The nations with the best access to business capital in 2008 (previous year’s ranking in parentheses) are the following:

1. Canada (1)
2. Hong Kong (2)
3. United Kingdom (4)
4. Singapore (5)
5. United States (6)
6. Switzerland (3)
7. Sweden (11)
8. Australia (9)
9. Netherlands (7)
10. Finland (10)

The Milken Institute is a nonprofit, independent economic think tank based in Santa Monica, Calif.

IE