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Bank- and market-oriented financial systems: fact or fiction?

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  • B. SCHOLTENS

    (University of Amsterdam)

Abstract

Many distinguish between financial systems with a dominant role for banks and those with a dominant role for financial markets, assuming this is of great importance for economic development. The author analyses why the distinction might matter, first by investigating how bank and market finance affect economic development. A framework to analyse the financial system is then developed. Finally, a comparative analysis of two so-called bank-oriented countries (Germany and Japan) and two so-called market-oriented countries (the UK and the US) is performed to reveal whether or not there are fundamental differences between their financial systems. The evidence does not support the idea of a distinction between bank- and market-based financial systems, with all four countries showing unique characteristics.

Suggested Citation

  • B. Scholtens, 1997. "Bank- and market-oriented financial systems: fact or fiction?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(202), pages 301-323.
    • Handle: RePEc:psl:bnlqrr:1997:33
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10580/10464
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    Cited by:

    1. Kuppers, Markus, 2001. "Curtailing the black box: German banking groups in the transmission of monetary policy," European Economic Review, Elsevier, vol. 45(10), pages 1907-1930, December.

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    More about this item

    Keywords

    Economic development; Bank finance; Market finance;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General

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