Indicators of Growth
Financial sectors like banks, insurance companies, financial institutions, investment firms, financial securities dealers and brokers are the most important players in any country. The country's economy depends to a great extent on these sectors. To cater to the needs of the financial services, these institutions and companies have created thousands of branches in every major city and town. These branches are responsible for ensuring the smooth functioning of various financial services all through the country.
Banks: A major part of the financial services sector is bank. It is the financial institution that provides the basic banking services including lending, trading, investing, borrowing and so on. All the transactions are done through these banks. A major portion of the business transactions are carried out by these banks through the banks. These days, almost all the products are provided by these banks.
Insurance Companies: Insurance companies form a major part of financial sectors. The main function of these companies is providing financial products such as life insurance, health insurance, disability insurance, property insurance, etc. These companies provide various financial products such as borrowing, investing, underwriting, etc. They also provide the international economic and political guidance.
Financial Regulators: These financial sectors regulate the functioning of all the banks. The main task of these regulators is to ensure that financial products of the banks are maintained in the interest of the customers. The main regulation that is implemented is the "Regulatory Code of Ethics".
Developing Economies: Developmental economies are also very crucial for the overall development. This is because the demand and supply forces are interdependent in developing economies. In developing economies, the demand for capital goods, including infrastructure and human capital, is high while the supply is low. Hence, there is intense competition among banks in developing economies resulting in a more flexible, open and transparent financial sector. On the other hand, financial regulations are much more rigid in developed economies.
Consumer Staples: The food and beverage, automobiles, and consumer staples industries are the largest employers in the United States. These industries provide jobs to millions of people in the United States. The consumer staples industry alone employs more than three million people in the United States. The two main financial sectors in the United States are the automobile and food processing industries.
Automobile firms produce and manufacture cars, trucks, buses, etc. Meanwhile, food processing and consumer staples firms manufacture and distribute food items such as sugar, cereals, cookies, and potato chips. These firms employ millions of people worldwide. However, financial sectors are less important in the consumption value chain of these firms. The main reason for this is that the United States is a manufacturing-oriented economy which is not primarily based on consumer staples.
Financial Institutions: The monetary and banking system include the Federal Reserve Bank, the Federal Deposit Insurance Corporation, the National Banks, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Department of the Treasury. These institutions play a major role in the economy by facilitating and guaranteeing credit. Without financial institutions, the money system would not function because cash is the basic unit of money. Thus, financial sector openness and development have an impact on the overall economy of the United States. As the name suggests, banking and financial sectors are the main drivers of the US economy.
5 Most Prominent Industries: There are various kinds of businesses in the financial industry. Some of them are insurance firms, investment banking, commodity markets, and international trade. These sectors invest a large amount of money in the stock exchange, bonds, commodities, and securities. They also involve themselves in activities which are related to money and finance such as derivatives, securities brokering, interest rate determination, and foreign exchange. Financial market sector contributes to the overall economic picture of the United States.
5 Main Stock Market Sectors: The stock market includes publicly traded companies listed in the stock exchange. The stock market helps in the financial sector development. As far as the development is concerned, it depends on the economy, the state of the market sectors, fiscal policy, and the level of consumer spending. Other main stock market sectors include the property market, bond market sectors, and the financial service market sectors. Each of these sectors to help in the overall development process.
5 Indicators of Growth: All the above aspects help in determining the overall health of the market sector. The gross domestic product (GDP) growth is determined by these factors. The gross domestic product growth rates are affected by changes in the unemployment rate, inflation, and interest rates. As far as the stock market sector is concerned, the key indicator of its health is the stock market capitalization. It measures the total value of the company's stocks and shares as a whole.