Report: Robust global financial system necessary for economic growth

​Olin professor, lead author Thakor says interconnectedness creates opportunities, challenges

​It’s the multibillion dollar question: What drives economic growth? Diverse sources of capital and a thriving global financial system are key, according to a new report from the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC).


Released last week and authored by Anjan Thakor, PhD, the John E. Simon Professor of Finance at Washington University in St. Louis, the report, “International Financial Markets: A Diverse System is the Key to Commerce,” provides a broad overview of the global financial system and how it supports economic growth, facilitates global trade and creates opportunities for companies, entrepreneurs and individuals.

“The global financial system is a vast combination of traded securities, markets and contracts,” said Thakor, who also serves as PhD program director at Washington University’s Olin Business School. “This study describes and examines this system from the perspective of the role the global financial system plays in facilitating economic growth and the meeting the needs of individuals and companies.

“The main conclusions are that a robust global financial system helps economic growth, creates more opportunities for individuals and firms, and that it is highly interconnected.”

Along with those opportunities come challenges for regulators of institutions and markets in terms of striking a balance between the need for transparency in this system and the need to enable the system to facilitate economic growth, according to Thakor.

“Understanding how this system works, and how to support it, is critical as regulators on every continent look to modernize or alter current regulatory structures,” he added.

To accompany the report, the CCMC also has published an interactive infographic that shows the daily challenges faced by business owners around the world, and the ways main street businesses utilize the financial industry to overcome them.

An infographic produced by the CCMC illustrates the “Key to Commerce” for business owners around the world. (Click image to view.) (Credit: U.S. Chamber of Commerce)

The full report is available online here.

About the CCMC
Since its inception in 2007, the CCMC has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

About the U.S. Chamber of Commerce
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors and regions, as well as state and local chambers and industry associations.

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