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Banks and Markets: the Changing Character of European Finance

  • Rajan, Raghuram G
  • Zingales, Luigi

In the last two decades the European financial markets have become more market-oriented. We analyse the economic and political forces that have triggered these changes as well as their likely welfare implications. We also try to assess whether this trend will continue. Based on our analysis, we conjecture that even if Europe might benefit from a continuation of the trend, in the near future political support for it is likely to become much weaker. Furthermore, without serious reforms, the trend is likely to benefit Southern Europe less than Northern Europe.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3865.

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Date of creation: May 2003
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Handle: RePEc:cpr:ceprdp:3865
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