Financial Industry

Financial Industry

Industry/    Crises/    Governance/    Deficit

The financial sector is composed of organizations and institutions concerned with the flow of capital.  It includes the banking industry, brokerage firms, insurance companies, asset management companies, real estate companies and Government Sponsored Entities.  Despite the lack of tangible products, the financial sector is responsible for an increasing share of the United State’s Gross Domestic Product.  Finance and Insurance was responsible for 6.6% of the GDP in 2012.  Real Estate, Rental and Leasing—categorized separately—were the GDP’s largest single industry responsible for 12.9% of all goods and services in the United States.

The U.S. economy is increasingly dependent upon the services of the financial industry for proper functioning.  Problems and disruptions in the financial sector have the potential to fundamentally alter not only the United States but also the economies of developed and developing nations internationally.  The United States has been on the brink of collapse multiple times in the past century due to crises in the financial sector.  Fraud, corruption and ineffective regulation were primary factors in the Savings and Loan debacle of the late 1980s and the housing market collapse that sparked the Global Economic Crisis of 2008.  The measures taken to avert a great depression bloated the federal deficit and sparked a series of reforms accompanied by a flurry of lobbying activity from the financial sector.

The IC Financial Sector database is a clearinghouse of primary and secondary sources on the financial industry, its crises, its oversight, political interference with regulators and regulatory reform and the financial sector’s impact on the deficit.

Industry

The financial sector includes the banking industry, brokerage firms, insurance companies, asset management companies, real estate companies, and Government Sponsored Entities.  Its proper functioning is essential to the U.S. economy and quality of life.  Primary and secondary documents detailing the major corporations that compose the financial industry are contained in this section. [Read More…]

Crises

Crises in the financial industry have threatened the quality of life in the United States several times throughout the 20th and 21st century.  Warnings of a Great Depression surrounded the collapse of the banking industry in the late 1980s, known as the Savings & Loan Debacle, and the Global Financial Crisis of 2008.  Sectors of the economy have, also, been labeled as potential ground zero for a large-scale failure that could destroy the economy.  Primary and secondary sources detailing the crises and potential crises that almost have and could bankrupt the country are contained in this section. [Read More…]

Governance

Fraud, corruption and greed have been the backbone to the financial crises of the late 20th and early 21st century.  The regulatory system for the financial industry has consistently failed to catch fraud schemes before they snowballed into financial catastrophes that cost taxpayers trillions and left institutional investors, such as pension funds, penniless.  The regulatory system for the financial industry is severely fractured with ambiguous jurisdictions and enforcement abilities.  Regulatory reform has followed each financial crises, however, political interference with regulators and the lobbying activity of the financial sector have further hampered the effectiveness of the regulatory system.  Primary and secondary sources detailing the governance of the financial industry and the forces that are interfering with it are contained in this section.  [Read More…]

Deficit

The infusion of taxpayer dollars into the financial sector has been the sole reason the economy survived the meltdown of the Savings & Loan industry in the late 1980s and the Global Financial Crisis of 2008.  The federal bailouts of the financial sector have contributed to a skyrocketing federal deficit, which is so large it is now classified as a national security threat.  Primary and secondary sources detailing the impact of financial crises on the federal deficit are contained in this section. [Read More…]