Financial systems importance, differences, and convergence

GÜLCEMAL T.

Evolution of Money, Banking and Financial Crisis: History, Theory and Policy, Peter Lang Ag, ss.121-135, 2020 identifier

  • Yayın Türü: Kitapta Bölüm / Araştırma Kitabı
  • Basım Tarihi: 2020
  • Yayınevi: Peter Lang Ag
  • Sayfa Sayıları: ss.121-135
  • Anahtar Kelimeler: Bank-based systems, Financial systems, Market-based systems
  • Sivas Cumhuriyet Üniversitesi Adresli: Evet

Özet

The financial sector only encompasses the supply of financial services while the financial system includes both supply and demand and the way in which supply and demand are matched. The money and capital markets make possible the exchange of current income for future income and the transformation of savings into investment so that production, employment, and income can grow, and living standards can improve. The importance of financial markets and financial intermediaries differs across countries. The financial sector performs two important functions like reducing information and transaction costs and facilitating the trading, diversification, and management of risk. What are the differences in financial systems and how do these affect macroeconomic outcomes? This chapter discusses these and other positive and negative aspects of bank-based and market-based systems.