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Efficiency and Benefit-Cost Analysis of the Financial System

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  • Thomas Philippon

Abstract

Financial intermediation arises from the need for expertise in channeling capital from savers to borrowers in the presence of transaction costs. I present a framework for measuring the overall efficiency of financial intermediation and emphasize some key challenges in applying benefit-cost analysis to finance: long-run cycles in financial activity, the burden of proof between regulators and the regulated, and the interaction between benefit-cost analysis and academic research.

Suggested Citation

  • Thomas Philippon, 2014. "Efficiency and Benefit-Cost Analysis of the Financial System," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 107-120.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/676685
    DOI: 10.1086/676685
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    References listed on IDEAS

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    1. repec:hal:spmain:info:hdl:2441/53fhlrk21m95fr2o3ajosmu5jg is not listed on IDEAS
    2. repec:hal:spmain:info:hdl:2441/5qjkarlp3e8a2a40vbqo698d3v is not listed on IDEAS
    3. Olivier Godechot, 2015. "Financialization Is Marketization! : A Study on the Respective Impact of Various Dimensions of Financialization on the Increase in Global Inequality," Sciences Po publications 15/3, Sciences Po.
    4. Eric A. Posner & E. Glen Weyl, 2014. "Benefit-Cost Paradigms in Financial Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 1-34.
    5. Olivier Godechot, 2015. "Financialization Is Marketization!," Working Papers hal-03459520, HAL.
    6. Olivier Godechot, 2015. "Financialization Is Marketization!," SciencePo Working papers Main hal-03459520, HAL.
    7. Matthew Jaremski & Ayse Sapci, 2017. "Understanding the Cyclical Nature of Financial Intermediation Costs," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 181-201, July.

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