Banks and Markets: The Changing Character of European Finance

Luigi Zingales, Raghuram G. Rajan

NBER Working Paper No. 9595
Issued in March 2003
NBER Program(s):Corporate Finance

In the last two decades the European financial markets have become more market oriented. We analyze the economic and political forces that have triggered these changes as well as their likely welfare implications. We also try to assess whether this trend will continue. Based on our analysis, we conjecture that even if Europe might benefit from a continuation of the trend, in the near future political support for it is likely to become much weaker. Furthermore, without serious reforms, the trend is likely to benefit Southern Europe less than Northern Europe

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Document Object Identifier (DOI): 10.3386/w9595

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