The Efficiency and Stability of Banks and Markets
نویسنده
چکیده
Traditionally, financial systems have been bank-based or market-based. The efficiency properties of these systems are compared in various dimensions. These include risk sharing, information provision, funding new industries, corporate governance, and law, finance and politics. Both systems have advantages and disadvantages. With regard to stability, both bank-based and market-based systems are subject to crises. Going forward a financial system with financial intermediaries and markets would have many advantages and few disadvantages. * Prepared for the conference on “Efficiency and Stability in an Evolving Financial System” organized by the National Bank of Belgium, to be held on May 17-18, 2004.
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