The Evolving Importance of Banks and Securities Markets

The Evolving Importance of Banks and Securities Markets

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This paper examines the evolving importance of banks and securities markets during the process of economic development. As economies develop, they increase their demand for the services provided by securities markets relative to those provided by banks, such that securities markets become increasingly important for future economic development. Some exploratory evidence further suggests that deviations of a country s actual financial structure -- the mixture of banks and markets operating in an economy -- from the estimated optimal structure are associated with lower levels of economic activity.

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Bibliographic Details
Main Authors: Demirguc-Kunt, Asli, Feyen, Erik, Levine, Ross
Format: Policy Research Working Paper biblioteca
Language:English
Published: 2011-09-01
Subjects:ACCOUNTING, BANK CREDIT, BANK REGULATION, BANKING SYSTEM, BENCHMARK, BENCHMARKS, BOND MARKET, BOND MARKET CAPITALIZATION, CAPITAL ACCUMULATION, CAPITAL MARKETS, CAPITALIZATION, CENTRAL BANKS, COMMON LAW, COMPARATIVE ADVANTAGE, COMPARATIVE ANALYSES, CREDIT DEPOSIT, CREDIT INCREASES, CREDITS, DEBT, DECENTRALIZED MARKETS, DEPOSIT, DEPOSIT MONEY BANK, DEVELOPMENT POLICY, DIVERSIFICATION, DOMESTIC BOND, DOMESTIC BOND MARKETS, DUMMY VARIABLES, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC OUTCOMES, ECONOMIC STRUCTURE, ECONOMIC THEORY, EMERGING MARKETS, ENDOWMENTS, EQUITY MARKETS, EXPORTS, FEDERAL RESERVE, FEDERAL RESERVE BANK, FINANCIAL DEVELOPMENT, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FINANCIAL STRUCTURE, FINANCIAL STRUCTURES, FINANCIAL STUDIES, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, GDP, GDP PER CAPITA, GROSS DOMESTIC PRODUCT, HOUSEHOLDS, INCOME, INFLATION, INFLATION RATE, INTANGIBLE, INTERNATIONAL BANK, INTERNATIONAL DEVELOPMENT, MARKET LIQUIDITY, MARKET TRANSACTIONS, MARKET VALUE, MERCHANDISE, MERCHANDISE EXPORTS, NATIONAL ECONOMIES, NATURAL RESOURCES, POLITICAL ECONOMY, PRIVATE BOND, PRIVATE CREDIT, PUBLIC ENTERPRISES, REAL GDP, RETURN, RETURNS, SAVINGS, SECURITIES, SECURITIES MARKET, SECURITIES MARKET DEVELOPMENT, SECURITIES MARKETS, STOCK EXCHANGES, STOCK MARKET, STOCK MARKET CAPITALIZATION, STOCK MARKET DEVELOPMENT, STOCK MARKETS, SYNCHRONOUS STOCK PRICE MOVEMENTS, TRADING,
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111013154944
http://hdl.handle.net/10986/3611
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Summary:This paper examines the evolving importance of banks and securities markets during the process of economic development. As economies develop, they increase their demand for the services provided by securities markets relative to those provided by banks, such that securities markets become increasingly important for future economic development. Some exploratory evidence further suggests that deviations of a country s actual financial structure -- the mixture of banks and markets operating in an economy -- from the estimated optimal structure are associated with lower levels of economic activity.

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