Why do financial systems differ? History matters

Cyril Monnet and Erwan Quintin ()

No 304, Center for Latin America Working Papers from Federal Reserve Bank of Dallas

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; markets (search for similar items in EconPapers)
Date: 2004
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Journal Article: Why do financial systems differ? History matters (2007)
Working Paper: Why do financial systems differ? History matters (2005)
Working Paper: Why do financial systems differ? History matters (2005)
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