|Does Financial Structure Matter?
What are the relative advantages and disadvantages of bank-based financial systems and market-based financial systems?
In bank-based systems (as in Germany and Japan) banks play a leading role in mobilizing savings, allocating capital, overseeing the investment decisions of corporate managers, and providing risk management vehicles. In market-based systems (as in England and the United States) securities markets share center stage with banks in getting society's savings to firms, exerting corporate control, and easing risk management. As countreis grow richer, financial markets play a more important role relative to banks.
Cross-country research has shown the irrelevance of the distinction between bank- and market-based financial system and has shown the importance of effective financial service delivery. It is of secondary order who provides these services. This research has also shown that it is important to focus on the underlying determinants of a sound and effective financial system, such as the contractual and informational environment. Research papers related to the issue of financial structure were presented at a conference on February 10 and 11, 2000 at the World Bank.Database
This database of Indicators of Financial Development and Structure across countries and over time is unique in that it unites a range of indicators that measure the size, activity and efficiency of banks, non-banks financial institutions and capital markets. Data are available for over 100 countries and for the period 1960-2003. The database is being regularly updated.
Policy Research Working Papers
For more policy research working papers from the World Bank's institutional archives, search here using author’s last name, title or working paper number (“wpsxxxx”).
|WPS5880||Job growth and finance : are some financial institutions better suited to early stages of development than others?||Cull, Robert; Xu, L. Colin||2011/11|
|WPS5020||Finance in Africa - Achievements and Challenges||Beck, Thorsten; Fuchs, Michael; Uy, Marilou||2009/08|
|WPS4943||Financial institutions and markets across countries and over time - data and analysis||Beck , Thorsten; Demirguc-Kunt, Asli; Levine, Ross||2009/05|
|WPS3938||Creating a more efficient financial system : challenges for Bangladesh||Beck, Thorsten; Rahman, Md. Habibur||2006/06|
|WPS3856||Creating an efficient financial system : challenges in a global economy||Beck, Thorsten||2006/02|
|WPS3656||World Bank lending and financial sector development||Cull, Robert; Effron, Laurie||2005/07|
|WPS2430||Financial structure and bank profitability||Demirguc-Kunt, Asli; Huizinga, Harry||2000/08|
|WPS2432||Funding growth in bank-based and market-based financial systems : evidence from firm level data||Demirguc-Kunt, Asli; Maksimovic, Vojislav||2000/08|
|28205||Does integration with global markets affect firms' financing choices? evidence from emerging economies||Vesperoni, Esteban ; Schmuckler, Sergio||2000/02|
|WPS2143||Bank-based and market-based financial systems - cross-country comparisons||Demirguc-Kunt, Asli; Levine, Ross||1999/07|