The credit crisis gripping Wall Street is spilling over into other industries and could impact local jobs, according to Chicago financial executives and economists.

In a forum Wednesday sponsored by the Chicago Council on Global Affairs, a panel of local industry experts agreed that America needs a confidence boost before the financial markets will stabilize.

The messy affair of the housing and credit situation began with what panelist William Osborn called the creation of “asset bubbles” encouraged by excessively cheap credit. Osborn, chairman of the board at Chicago-based Northern Trust Corporation, said the deflating of the bubble is a painful process.

“Confidence is totally required in our financial system,” Osborn said. But with confidence down now, he said funding between financial institutions has dried up, necessitating a federal bailout. What most fail to understand, he added, is the influence this financial situation has on other markets and industries.

Diane Swonk, senior managing director and chief economist at Mesirow Financial Holdings Inc., said the crisis is having a negative impact on confidence and jobs.

“Even those who are working in this economy are feeling worse about it – not just because energy prices have gone up, because their actual income has fallen from a year ago,” Swonk said. She said the possible consequences include a stunted holiday season if retailers can’t get capital for new inventory.

In addition, seasonal workers may not be hired, and those in industries like customer service could find tips and hours compromised as companies scale back their spending.

Fortunately, the U.S. is not alone in this crisis.

“We have a global funding crisis here in the last week, which has been pretty much an international phenomena, not just the U.S. phenomena,” said David Hale, founder and chairman of David Hale Global Economics. “What this means is that what began as an American problem has had very, very powerful ripple effects. And those will continue for the time being.”

Hale said the global economy will slow in countries like Europe and Japan, increasing the risk of recession in the U.S. He added that inflation shocks in food, wheat, soybeans and other commodities are not helping matters and rising interest rates further impede economic growth.

But there is a light at the end of this long, dark tunnel, according to Swonk. As many big name banks find themselves in hot water, several Chicago banks “look a lot smarter than their Wall Street counterparts,” she said.

“It’s an opportunity for many of the niche players in Chicago to gain some market share,” among them PrivateBancorp Inc., William Blair & Company LLC and Mesirow Financial Holdings Inc., Swonk said.

Like most Chicago-based banks, the U.S. dollar is weathering the storm. Hale said foreign countries will continue to buy U.S. securities in order to keep the global economy and their exchange rates stable, which will support the value of the dollar. To some extent, the U.S. deficit will be backed by global funding, as the dollar is still held as the reserve currency for the international community.

This crisis situation, as the panelists called it, is a cold hard fact that the nation will not get out of easily – but it will end. They said the bailout plan currently before Congress, however unrefined and faulty it may be, is a step in the right direction.

“It is a critical aspect of one step to rewriting our financial infrastructure and rewriting the game plan for the 21st century,” Swonk said.