Since the 1990s the financial economy has been swelling at a pace outstripping the growth of the real economy, reflecting such factors as the global surplus of funds and the advances in financial technology, which have allowed investment funds to thrive. The global volume of financial assets was $12 trillion as of 1980, equivalent to 109% of global gross domestic product, but as of 2007 the figure had ballooned to $195 trillion, or 355% of global GDP. The financial economy thus became widely separated from the real economy. The current financial crisis may be seen as the result of a process of bringing the financial economy back into balance with the real economy, a development set off by the subprime lending problem and accelerated by the credit crunch that occurred in response to the shock of Lehman Brothers' collapse.

The financial crisis has forced direct finance to recede, making it difficult to raise funds through the market. There is also fear that the pool of suppliers of risk funds will shrink. The aftereffects are likely to be felt for some time to come, taking a toll on economic and business activity.

The US government has responded to the crisis speedily and on a large scale, taking measures to stabilize finance, but this has resulted in the sharp expansion of the fiscal deficit and deterioration of the balance sheet of the Federal Reserve System. There are concerns that these developments may lead over the medium to long term to a weakening of confidence in the dollar, with investors moving away from dollar-denominated assets and countries reconsidering the pegging of their currencies to the dollar; this could mean acceleration of the shift toward the euro. We will be watching to see whether the new Obama administration comes out with a strong-dollar policy in order to maintain the dollar's status as the key reserve currency.