{
  "id": 3403941,
  "title": "Why the world still needs Wall Street",
  "url": "https://urgent.news/2026/08/26/why-the-world-still-needs-wall-street",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-26T02:09:09.000Z",
  "source": {
    "name": "The Jakarta Post",
    "slug": "the-jakarta-post",
    "url": "https://www.thejakartapost.com/opinion/2026/08/26/why-the-world-still-needs-wall-street.html"
  },
  "original_language": "en",
  "account": "The world continues to rely on Wall Street despite alternative financial systems vying for dominance. Some nations possess limited capacity to absorb large, rapid capital inflows without destabilizing themselves. Investors have plenty of reasons to diversify investment away from the United States. However, the world has not seen a significant exodus from US markets. The dollar remains the dominant currency, accounting for 56.8 percent of foreign-exchange reserves and 89.2 percent of all foreign-exchange trades. Its dominance is attributed to America's economic size, legal protections, innovative companies, deep capital markets, and the network effects resulting from its roles in trade, credit, payments, and reserves. However, the real constraint is the absorptive capacity of other financial systems, which can only handle a certain amount of capital reallocation before becoming unstable. This constraint stems from the network of exchanges, banks, dealers, clearinghouses, custodians, regulators, courts, auditors, lawyers, data providers, and central banks that facilitate massive capital flows. Diversification is typically viewed from the perspective of individual investors, whereas the true challenge lies in the system-wide capacity to handle such large-scale reallocation without causing extreme shifts in asset prices, yields, or exchange rates. When thousands of large institutions attempt to diversify simultaneously, the effects on destination markets can be significant, leading to price surges, falling yields, currency appreciation, and potential constraints on prudential limits. While diversification may seem sensible for individual investors, attempting it collectively could prove impractical, highlighting the fallacy of composition.",
  "summary": "Other financial systems have only so much capacity to receive a large and rapid reallocation without destabilizing themselves.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}