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Financial Accounting Standards Board

shocking disclosures of misrepresentation of financial Cochran, Thomas C. (1966). Business organization and the
information, insider trading, appropriation of company development of an industrial discipline. In Thomas C.
funds for personal use by top executives—including chief Cochran and Thomas B. Brewer (Eds.), Views of American
executive officers—and other violations of corporate gov- economic growth: The agricultural era. New York: McGraw-
Hill.
ernance in the United States.
Davis, Joseph Stancliffe (1917). Essays in the earlier history of
American corporations (Vol. 1). Cambridge, MA: Harvard
THE PLACE OF THE FINANCE University Press.
INDUSTRY Gage, Lyman Judson (1900, January 1). Secretary Gage reviews
The finance industry continues to be of central impor- the nation’s finances. The New York Times Supplement:
Annual Financial Review.
tance in the United States. The Bureau of Economic
Goldsmith, Raymond (1969). Financial structure and develop-
Analysis, part of the U.S. Department of Commerce,
ment. New Haven, CT: Yale University Press.
reanalyzed gross domestic product (GDP) by industry
International Organization of Securities Commissions.
data based on the North American Industry Classification http://www.iosco.org
System, which was introduced in the 1990s. The analysis
for the period from 1987 to 2000 showed that the indus- Lawson, William Ramage (1906). American finance: Part first.—
domestic. Edinburgh and London: Blackwood.
try category, “Finance, insurance, real estate, rental, and
National Association of Securities Dealers Automated Quota-
leasing (FIRE),” was the number-one contributor to
tions. http://www.nasdaq.com
“value added by industry group in current dollars as per-
New York Stock Exchange. http://www.nyse.org
centage of Gross Domestic Product for selected years.”
Schumpeter, Joseph A. (1934). The theory of economic develop-
These are the figures for the finance category: ment: An inquiry into profits, capital, credit, interest, and the
business cycle. Cambridge, MA: Harvard University Press.
Securities and Exchange Commission. (n.d.). The investor’s
1987 1997 2000 advocate: How the SEC protects investors and maintains
Gross domestic product 100.0 100.0 100.0 market integrity. Retrieved November 14, 2005, from
Finance, insurance, real estate, 17.7 19.2 19.7 http://www.sec.gov/about/whatwedo.shtml
rental and leasing U.S. Department of Commerce. Bureau of Economic Analysis.
http://www.bea.gov
Williamson, Harold F. (1951). Growth of the American economy
The advance-industry estimates for 2004 noted that FIRE (2nd ed.). Englewood Cliffs, NJ: Prentice-Hall.
comprised a larger share of current-dollar GDP (20.7 per- Wright, R. E. (2002) The wealth of nations rediscovered: inte-
cent) than goods-producing industries (19.6 percent) in gration and expansion in american financial markets 1780-
2004. 1850. New York: Cambridge University Press.

THE GLOBALIZATION OF FINANCE
Mary Ellen Oliverio
The transformation of capital markets from the national
level to the global level increased considerably during the
final decade of the twentieth century. Leadership is pro-
vided through the International Organization of Securi- FINANCIAL
ties Commissions (IOSCO), which was organized in the
early 1970s. More than 90 percent of the world’s financial ACCOUNTING
activity was represented among the more than 181 STANDARDS BOARD
national security regulators who were members of IOSCO The United States has a longstanding tradition of
in 2005. One of the key goals for 2005 was to strengthen accounting standards being set by the private sector as
capital markets against financial fraud. opposed to the government. Although the federal govern-
ment’s Securities and Exchange Commission (SEC) has
SEE ALSO Finance
the legal authority to establish accounting standards for
public companies, the SEC has historically looked to the
BIBLIOGRAPHY
private sector to set accounting standards.
Baskin, Jonathon Barron, and Miranti, Paul J., Jr. (1997). A his-
tory of corporate finance. New York: Cambridge University The first two standard-setting organizations in the
Press. United States were the Committee on Accounting Proce-
dure (CAP), which was established in 1938, and the
Chernow, Ron (1990). The house of Morgan: An American bank-
ing dynasty and the rise of modern finance. New York: Atlantic Accounting Principles Board (APB), which replaced the
Monthly Press. CAP in 1959. Both organizations were committees of the

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