Financial Structure, Economic Growth and Development
IÉSEG Working Paper Series 2017-ACF-04
70 Pages Posted: 13 Sep 2017
There are 2 versions of this paper
Financial Structure, Economic Growth and Development
Financial Structure, Economic Growth and Development
Date Written: September 11, 2017
Abstract
Financial intermediaries and markets can alleviate market frictions through producing information and risk sharing in different ways. In practice, the structure of financial systems can be bank-based or market-based, varying across countries. The influence of financial structure on economic growth is dependent on the overall development of the real economy and institutions. The association is also different during crisis periods and non-crisis periods. Market-based systems tend to have an advantage for financially dependent industries in good times but are a disadvantage in bad times. The recent rapid growth of shadow banking benefits economic growth but also poses additional risks to the financial system and real economy.
Keywords: Banks, Markets, Shadow banking, Economic Growth
JEL Classification: G20
Suggested Citation: Suggested Citation