6 of the Biggest Players in the Finance Industry

The Securities and Exchange Commission
The Securities and Exchange Commission (SEC) is the watchdog of the United States stock markets. The role of the SEC is to keep an eye on the securities markets and catch individuals or organizations or companies who are breaking SEC rules. The SEC attempts to protect investors as well as maintain fair, orderly and efficient markets.

The SEC is a United States federal agency and receives direct funding from Congress. There are roughly thirty five hundred employees within the SEC in eleven locations including Washington, DC (headquarters), New York, Chicago, Los Angeles, Denver, Atlanta, Miami etc.

The SEC has the authority to bring civil action against either individuals or companies who have allegedly committed either bribery, fraud or engaged in insider trading in addition to other securities law violations.

Federal Reserve
The United States Federal Reserve (FED) has a tremendous amount of influence and impact on financial markets and should always be monitored when it comes to their decisions. From a traders perspective the FED should be listed on the top of the totem pole when reviewing news and economic decisions.

The meeting of the FED usually plays a role in the United States as well as the rest of the world’s economies. Fears of inflation may prompt the FED to raise interest rates. In September there was strong sentiment that the FED was going to raise interest rates. This is what many economists would deem as lift-off considering the interest rates has been at 0 for the last several years. However, the FED has remained passive in their approach to raising rates and September was just another month of status quo regarding interest rate hikes.

One of the major factors affecting the FEDS decision on not raising rates is the lack of inflation within the present economy. In addition, in the first quarter of this year saw somewhat of a contraction and the FED’s passiveness could be associated with their confidence in the United States economy remaining strong.

The International Monetary Fund
The International Monetary Fund (IMF) plays a crucial role in maintaining economic stability throughout the world. It is very important for politicians, economists and traders to keep an active eye on activity within The International Monetary Fund. The IMF was created in Bretton Woods, New Hampshire in July of 1944. The purpose of creating the IMF was to attempt to avoid the destructive devaluations of currencies throughout the world during the 1930s which ultimately led to the Great Depression.

There has been a great deal of concern recently about the lack of growth throughout developing world nations. The IMF believes that growth in many developing nations will remain static and will only increase somewhat in 2016. The IMF reported that emerging economies should see a fifth consecutive year of falling growth rate. The IMF also report that the amount of debt associated to emerging market companies was at an all time high and that it’s possible that any rate hikes could accelerate corporate bankruptcies.

People’s Bank of China
China’s economy is massive and Forex traders, politicians, economists and analysts typically keep a close eye on activities taking place economically. The most recent slowdown in China’s economy has forced the People’s Bank of China to inject 140 billion Yuan into banks through its short term lending operations.

Chinese stocks have remained in a bear market falling more than 20% since June. This issue has many investors wondering when the market will bottom out. The slowdown in the Chinese economy is pushing people to invest outside of China.

The Chicago Mercantile Exchange (CME)
The CME was created in 1898 as the Chicago Butter and Egg Board. Today, it is one of the most important financial institutions in the world. The CME allows traders to trade numerous vehicles including equities, currencies, commodities and interest rates. In addition, the exchange allows what we would call alternative investments which would include weather and real estate derivatives.

The number of agricultural commodity futures along with options presently available on the CME is tremendous. The present agricultural contracts consist of soybeans, oilseeds, grains, livestock, dairy, coffee, lumber etc. If a producer or end user is looking to manage their risk, or a trader/investor looking to benefit on the markets, the CME provides numerous options and futures contracts.

The New York Stock Exchange (NYSE)
The New York Stock Exchange also known as the Big Board is the world’s largest stock exchange (based on market capitalization) and the capitalization of the companies combined is close to twenty trillion dollars. The amount of trading volume is staggering and the average trading value runs at a tune of roughly one hundred and seventy billion USD. Presently, the NYSE is owned by Intercontinental Exchange which is an American holding and trades with the symbol of ICE. The NYSC is pivotal to the trading markets and the trading world is constantly focused on the exchange and the securities which are actively traded.

The NYSE is located on Wall Street which is considered the leading United States money center. Wall Street is made up of numerous financial institutions and the NYSE is considered the most important on this street of financial institutions.

In closing, the financial institutions discussed in this article play a pivotal role on not only how the economy functions but also the grease which allows the markets to operate and thrive.

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