Feyen, ErikDemirguc-Kunt, AsliLevine, Ross2012-03-192012-03-192011-09-01https://hdl.handle.net/10986/3611This 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.CC BY 3.0 IGOACCOUNTINGBANK CREDITBANK REGULATIONBANKING SYSTEMBENCHMARKBENCHMARKSBOND MARKETBOND MARKET CAPITALIZATIONCAPITAL ACCUMULATIONCAPITAL MARKETSCAPITALIZATIONCENTRAL BANKSCOMMON LAWCOMPARATIVE ADVANTAGECOMPARATIVE ANALYSESCREDIT DEPOSITCREDIT INCREASESCREDITSDEBTDECENTRALIZED MARKETSDEPOSITDEPOSIT MONEY BANKDEVELOPMENT POLICYDIVERSIFICATIONDOMESTIC BONDDOMESTIC BOND MARKETSDUMMY VARIABLESECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OUTCOMESECONOMIC STRUCTUREECONOMIC THEORYEMERGING MARKETSENDOWMENTSEQUITY MARKETSEXPORTSFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STRUCTUREFINANCIAL STRUCTURESFINANCIAL STUDIESFINANCIAL SYSTEMFINANCIAL SYSTEMSGDPGDP PER CAPITAGROSS DOMESTIC PRODUCTHOUSEHOLDSINCOMEINFLATIONINFLATION RATEINTANGIBLEINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTMARKET LIQUIDITYMARKET TRANSACTIONSMARKET VALUEMERCHANDISEMERCHANDISE EXPORTSNATIONAL ECONOMIESNATURAL RESOURCESPOLITICAL ECONOMYPRIVATE BONDPRIVATE CREDITPUBLIC ENTERPRISESREAL GDPRETURNRETURNSSAVINGSSECURITIESSECURITIES MARKETSECURITIES MARKET DEVELOPMENTSECURITIES MARKETSSTOCK EXCHANGESSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKET DEVELOPMENTSTOCK MARKETSSYNCHRONOUS STOCK PRICE MOVEMENTSTRADINGWorld Bank10.1596/1813-9450-5805