Editorial Reviews
Book Description
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.
Book Info
Text arguing that the idea that market-based financial systems are best is simplistic. Contends that a more nuanced approach, explaining why the complexity of financial markets makes this so. Softcover. Previously published in 2000. DLC: Finance.
Comparing Financial Systems
Comparing Financial Systems,Franklin Allen,Douglas Gale,The MIT Press,0262511258,Accounting - General,Business & Economics,Business / Economics / Finance,Business/Economics,Economics - General,Finance,Business & Economics / Finance,Economic systems,Monetary economics
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