History, asked by brishtymondal1642, 1 year ago

How was USA affected by wall street exchange?

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Answered by raaj75
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The most important financial center in the world?  A fabled place of silver spoons and golden parachutes?  A hub of cut-throat capitalism? Or all of the above. Wall Street is many things to many people, and the perception of what it really is depends on who you ask. Although people’s views of Wall Street may differ widely, what is beyond dispute is its enduring impact not just on the American economy, but on the global one.

Why Wall Street Is A Key Player In The World's Economy

The most important financial center in the world?  A fabled place of silver spoons and golden parachutes?  A hub of cut-throat capitalism? Or all of the above. Wall Street is many things to many people, and the perception of what it really is depends on who you ask. Although people’s views of Wall Street may differ widely, what is beyond dispute is its enduring impact not just on the American economy, but on the global one.

What is Wall Street anyway?

Wall Street physically takes up only a few blocks that amount to less than a mile in the borough of Manhattan in New York City; however, its clout extends worldwide. The term “Wall Street” was initially used to refer to the select group of large independent brokerage firms that dominated the U.S. investment industry. But with the lines between investment banks and commercial banks having been blurred since 2008, Wall Street in current financial parlance is the collective term for the numerous parties involved in the U.S. investment and financial industry. This includes the biggest investment banks, commercial banks, hedge funds, mutual funds, asset management firms, insurance companies, broker-dealers, currency and commodity traders, financial institutions and so on.

Although many of these entities may have their headquarters in other cities such as Chicago, Boston, and San Francisco, the media still refers to the U.S. investment and financial industry as Wall Street or simply “The Street.” Interestingly, the popularity of the term “Wall Street” as a proxy for the U.S. investment industry has led to similar “Streets” in certain cities where the investment industry is clustered being used to refer to that nation’s financial sector, such as Bay Street in Canada and Dalal Street in India.

Why Wall Street has such an impact

The U.S. is the world’s biggest economy, with 2013 gross domestic product (GDP) of $16.80 trillion, comprising 22.4% of global economic output. It is almost twice the size of the second-biggest economy, China (2013 GDP = $9.24 trillion). In terms of market capitalization, the U.S. is the world’s biggest by some distance, with a market value of $23.6 trillion dollars (as of September 23, 2014) that comprises 36.3% of global market capitalization. Japan’s $4.6-trillion market is a distant second, with just over 7% of global market cap.

Wall Street has such a significant impact on the economy because it is the trading hub of the biggest financial markets in the world’s richest nation. Wall Street is home to the venerable New York Stock Exchange (now called NYSE Euronext), which is the undisputed leader worldwide in terms of average daily share trading volume and total market capitalization of its listed companies. Nasdaq OMX, the second-largest exchange globally, also has its headquarters on Wall Street. Street firms together control trillions of dollars in financial assets, while New York is the second-largest trading center in the foreign exchange market, where daily trading volumes exceed $5 trillion.   



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