Banking and Finance Sector: Critical Infrastructure and Key Resources

Sector Overview

The Banking and Finance Sector, the backbone of the world economy, is a large and diverse sector primarily owned and operated by private entities. In 2007, the sector accounted for more than 8.0 percent of the U.S. gross domestic product.

This Sector consists of over 29,000 financial firms, including:

• depository financial institutions
  • banks
  • thrifts
  • credit unions
• insurers
• securities brokers/dealers
• investment companies
• certain financial utilities

Financial services firms provide a broad array of products to their customers. These products:

• allow customers to deposit funds and make payments to other parties;
• provide credit and liquidity to customers;
• allow customers to invest funds for both the long and short term, and
• transfer financial risks between customers.

The financial institutions that provide these services are all somewhat different, each within a specific part or parts of the financial services marketplace. Financial institutions operate to provide customers the financial products that they want, ensure the institution’s financial integrity, protect customers’ assets, and guarantee the integrity of the financial system. As such, financial institutions and the financial markets that they organize manage a wide variety of financial and certain non-financial risks.

In addition to the actions of financial institutions, direct financial regulation applies to many, but not all, financial services providers. The U.S. system of financial regulation is complex and exists at both the federal and state levels. The regulatory systems for financial services firms manage and regulate various forms of risk and guard against prohibited practices.

Read the Banking and Finance Sector Snapshot (PDF, 2 pages - 378 KB)