Financial Services Industry
Abstract
The financial services industry the complex web of organizations and firms that deal with the management of money serves as the foundation for U.S. industry and the broader economy. Through efficient and orderly allocation of capital within the U.S. economy, the financial markets seek to maximize return, thereby boosting the national wealth that underpins U.S. military, economic, and diplomatic strength. With the rise of competing financial markets in a globalized world, the challenge for U.S. policymakers is to create conditions for both investors and corporations to thrive in U.S. capital markets. Thus, future U.S. competitiveness depends on the ability to generate and attract capital, optimize regulatory practices, and properly manage risk. Although the U.S. financial services industry profits today from the liquidity generated by massive foreign capital inflows, the global U.S. economic position is steadily weakening. The United States has become the preeminent net debtor nation, investing more than it is saving, and guzzling resources from other economies to satisfy its consumption desires. While record levels of U.S. household debt have contributed to today's economic growth, that growth may have been achieved at the cost of jeopardizing the nation's economic future. Increased household debt, coupled with reduced savings, could limit the amount of capital available for more productive uses and increase U.S. reliance on foreign investment. In the face of concerns about U.S. debt accumulation, the attractiveness and credibility of the U.S. financial market may eventually deteriorate to a critical point. Aging global populations and rising energy costs will soak up liquidity throughout the world, exacerbating the capital crunch for U.S. financial markets.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2007
- Accession Number
- ADA475038
Entities
People
- David G. Bassett
- Gary W. Dickinson
- Greg Metzler
- Kevin J. Coyne
- Laura F. Dogu
- Laura K. Cooper
- Lewis C. Naumchik
- Portia E. Mccollum
- Robert J. Clark
- Timothy J. Fennell
Organizations
- Dwight D. Eisenhower School for National Security and Resource Strategy