Since the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, a ripple effect has been seen throughout the world because of the regulatory overhaul of the financial service industry. Despite the reports of major losses, such as that by J.P. Morgan Chase & Co. of more than $2 billion, there have been some big highs as well.
Financial Service Industry Facts
In 2011, $1.4 billion in total settlement funds was authorized through court-approved class action settlements, the lowest amount in more than a decade.
In 2011, there were 92 banks that ended up failing in the United States, but almost all of these were acquired by other institutions. Assets within this sector totaled over $58 trillion and for the US, this industry accounts for over 8% of the GDP. Retirement assets that are managed by this industry top $18 trillion and for the US economy alone, total holdings are over $100 trillion.
Main Key Facts About the Financial Services Industry
1. Even though $11 trillion is held in US-chartered depository institutions, only $835 billion is held in credit unions.
2. Life insurance companies currently hold over $5 trillion in assets.
3. For the last decade, the number of announced mergers and acquisitions within this field has been the greatest in the insurance industry.
Takeaway: When it comes to the US national debt of $18 trillion, according to some estimates, the reality is that the debt-to-income ratio of the entire nation is really at a 90/10 ratio. That means the total debt is only 10% using that base figure and considering a portion of the debt is to the Social Security program, the realistic figures are much less than that. Throwing around figures in trillions can be scary, but the reality is that the financial services industry is strong.
Other Facts to Consider About This Industry
1. Capital One instituted one of the largest mergers of financial services in 2011 in history in a deal with HSBC Holdings that had a total value of $33.8 billion. In the same year, Capital One also acquired ING for $9 billion.
2. Only AXA, a French-based company, broached the Top 10 financial acquisitions list in 2011.
3. Total employment within this industry reached 109.3 million, with 40% of these jobs located in the insurance industry.
4. California has the most employees involved in this field.
5. New York has the highest compensation rates on average within this industry, paying out over $467 billion in payroll.
6. 59% of the GDP generated by this industry is in real estate, renting, and leasing.
Takeaway: The bottom line of this industry is simple: it is the foundation of what capitalism means to the world today. The financial services industry allows for the average person to build true wealth, achieve their dreams, and create a future for their household of which they can be very proud. There might be debts to pay and finances to manage on a regular basis, but the statistics of this industry prove one thing beyond any other – that the US in particular is perfectly primed to maintain its status as a global leader.
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