Comparing Financial Systems / Edition 1

Comparing Financial Systems / Edition 1

by Franklin Allen, Douglas Gale
     
 

ISBN-10: 0262011778

ISBN-13: 9780262011778

Pub. Date: 01/07/2000

Publisher: MIT Press

Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial…  See more details below

Overview

Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial systems of most developed economies. Yet the form of these financial systems varies widely. Why do different countries have such different financial systems? Is one system better than all the others? Do different systems merely represent alternative ways of satisfying similar needs? Is the current trend toward market-based systems desirable?

Franklin Allen and Douglas Gale argue that the view that market-based systems are best is simplistic. A more nuanced approach is necessary. Financial institutions are not simply veils, disguising the allocation mechanism without affecting it, but are crucial to overcoming market imperfections. An optimal financial system relies on both financial markets and financial intermediaries.

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Product Details

ISBN-13:
9780262011778
Publisher:
MIT Press
Publication date:
01/07/2000
Edition description:
First Edition
Pages:
519
Product dimensions:
6.32(w) x 9.23(h) x 1.44(d)

Table of Contents

Preface
I Setting the Stage
1 Comparing Financial Systems
2 The Historical Development of Financial Systems
3 Institutions and Markets
4 Corporate Governance
5 The Limitations of Markets: The Classical View
II Competition Versus Insurance
6 Intertemporal Smoothing
7 Information and Resource Allocation
8 Competition in Banking
9 Financial Crises
10 Renegotiation and Relationships
III The Role of the Firm
11 Autonomous, SelfFinancing Firms
12 Objectives of Firms
IV Markets and Intermediaries
13 Diversity of Opinion and Resource Allocation
14 Costly Markets
15 Relationships and Risk Sharing
16 Afterword
IndeX

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