Why do financial systems differ? History matters

Cyril Monnet () and Erwan Quintin ()

No 442, Working Paper Series from European Central Bank

Abstract: We describe a dynamic model of financial intermediation in which fundamental characteristics of the economy imply a unique equilibrium path of bank and financial market lending. Yet we also show that economies whose fundamental characteristics have converged may continue to have very different financial structures. Because setting up financial markets is costly in our model, economies that emphasize financial market lending are more likely to continue doing so in the future, all else equal.

Keywords: Financial Systems; Financial Markets; Financial Institutions; Banks; Convergence. (search for similar items in EconPapers)
JEL-codes: L16 G10 G20 N20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-fin and nep-fmk
Date: 2005-02
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Related works:
Working Paper: Why do financial systems differ? History matters (2004)
Working Paper: Why do financial systems differ? History matters (2005)
Journal Article: Why do financial systems differ? History matters (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:ecb:ecbwps:20050442

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