Reasons for Examining Financial Institutions

Financial institutions (defined here onwards as commercial banks, savings associations, investment banks, venture capital firms, hedge and mutual funds, pension funds and their investment managers, and insurance companies) provide financial intermediation services that have an important and unique impact on the health of the US economy. These services cannot be replicated by the non-financial sector, and allow financial institutions to play an extremely important role which is well recognized by the Federal Reserve and other government regulatory agencies, Congress and the corporate sector. Financial institutions face constant change with ever-increasing challenges due to globalization, increasing corporate governance and opaqueness issues in financial transactions, changes in regulations, and rapid technological innovations. These trends are likely to continue to affect the industry at a hectic rate in the future. Members of the Center target studying the many issues facing this sector, bringing an analytic, but practical, framework to its analyses.