The Financial Sector—In Support of Growth or Financialization?

Hossein Askari () and Abbas Mirakhor
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Abbas Mirakhor: International Centre for Education in Islamic Finance (INCEIF)

Chapter 1 in The Next Financial Crisis and How to Save Capitalism, 2015, pp 1-15 from Palgrave Macmillan

Abstract: Abstract A stable and efficient financial sector has an essential role in support of the real sector to facilitate mechanisms for an efficient allocation of financial and real resources by funding the investments with the highest social rate of return: mobilizing savings, identifying the best business opportunities, financing these investments, monitoring their performance and their managers, enabling the trading, hedging, and diversification of associated risks, and facilitating the exchange of goods and services. Financial institutions, by pooling risk, should be better positioned to analyze investments and their associated risk-return profile and to monitor the performance of investment projects. Our financial system has achieved some of these goals but has also been accompanied by recurring crises.

Keywords: finance; financialization; intermediation; investment; risk; savings (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-54437-7_1

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DOI: 10.1057/9781137544377_1

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