The current account deficit of the United States reached 6.5 per cent of gross domestic product in 2006, the highest ratio ever recorded; with its counterpart in the growing surpluses of China and other Asian countries and oil producers, it has been financed easily thus far, but the share held by foreign authorities is rising.
The financial sector has made a fundamental contribution to economic growth in recent years by permitting unprecedented capital mobility and facilitating efficient capital allocation and by smoothly financing imbalances that in another era would have been disruptive. Financial innovation has enhanced market liquidity and reduced volatility.