Global Economy
The end of the halcyon days of the global finance industry
By Finfacts Team
Feb 10, 2012 - 8:36 AM

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The US financial sector accounted for just over 8% of the market capitalisation of the S&P 500 stock index companies in 1990 and peaked at over 22% by late 2006. It had dipped to 8.6% in early March 2009 and while it has recovered to about 12% in the interval, the halcyon days of the industry both in the United States and at global level, are over.

Two-thirds of the earnings growth in the global finance listed sector over the 1990-2007 period came after 2004, while profits increased 14-fold from 1990 to 2007. Non-financial sector earnings increased 7-fold.

In the US, labour compensation in the security and broking sector rose by 24 times over 1980-2008.

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