Running head: FORTIFYING US FINANCIAL SECTOR

Fortifying US Financial Sector

Name:

Institution:
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Fortifying US Financial Sector

Research question: What can the US do to fortify her banking and financial sector

without worsening her economic state and international norm?

Introduction:

A combination of factors has resulted to the weakening of American financial

institutions, particularly banks. Such problems have induced such institutions to loosen their

bookkeeping standards, project profitability evaluation, and loan and risk assessment.

Consequently, financial establishments end up as mere infant institution, which cannot face the

unforeseen changes in capital mobility, government policies, as well as, contagion from other

nations’ crisis. In this light, this research paper seeks to find out how the United States could

strengthen its banking and financial sector without compromising its economic state and

international norm.

Methods:

In order to achieve the objectives of this study, both primary and secondary data was

utilized. Primary data relating to US’s economic trend, foreign exchange policies, development

plan, and number of international and domestic bank operating within it, confidence level in

financial institution, laws and policies governing financial institutions’ transaction were

obtained. Such data was retrieved from the government bulletins, Federal Reserve Bank of New

York, ministry of planning and sustainable development and interviews with experts, bank

operators, and investors. Secondary data was retrieved from books, internet, and professor’s

advices.

Findings:
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The results of this study showed that, the past financial crisis were as a result of lack of

good corporate governance. In 2002, the more than 65 percent of the financial institutions

ignored the significance of international cooperation, as well as, assistance which results to the

worsening of the financial crisis (Mehran and Mollineneaux, 2012). Yet, it was established that

lack of transparency due to bad governance resulted to the weakening of the financial sector.

Conclusion:

The only way the United States can be able to fortify her entire banking and financial

sector without worsening her economic and international norm is by avoiding all the things that

resulted to the financial crisis seen a decade ago. As such, this study shows that it should

increase transparency in loan plans; enhance good corporate governance and control insurance

and government intervention.

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Reference:

Mehran, H and Mollineaux, L. (2012). Federal reserve Bank of New York staff report. JEL

classification: G01, G21, G32, G39.

Carmichael, J., & Pomerleano, M. (2002). The development and regulation of non-bank

financial institutions. Washington, D.C: World Bank.

Carey, M. S., Stulz, R. M., & National Bureau of Economic Research. (2006). The risks of

financial institutions. Chicago: University of Chicago Press.