TY - JOUR
T1 - A welfare comparison of intermediaries and financial markets in Germany and the US
AU - Allen, Franklin
AU - Gale, Douglas
N1 - Funding Information:
We thank the editor, Xavier Vives, an anonymous referee, Allen Berger, Elizabetta Bertero, Douglas Diamond, Gary Gorton, Martin Hellwig, Guy Laroque, Eric Maskin, David Miles, Patrick Rey, Michael Riordan, Jean Tirole and participants of the December 1993 DELTA/Compagnie Bancaire Conference in Paris, the April 1994 CEPR-Fundacion BBV conferencei n San Sebastian,t he May 1994 ABN-AMRO/ University of Amsterdam/ JFI conference, and seminars at the Bank of England and London School of Economics for helpful suggestions.A dam Dunsby and Frank Schmid provided researcha ssistancea nd comments. Financial assistancef rom the NSF and the Sloan Grant to the Wharton Financial Institutions Center is gratefully acknowledged.
PY - 1995/2
Y1 - 1995/2
N2 - There is wide variation in the structures of financial systems in different countries. We compare two polar extremes. In one, which we refer to as the 'German model', intermediaries predominate. In the second, which we refer to as the 'U.S. model', financial markets play the major role. Our objective is to contribute to a theoretical framework for the welfare analysis of comparative financial systems. The study is divided into two parts, which focus on financial services provided to households and firms, respectively. On the household side, we consider issues such as cross-sectional and intertemporal risk sharing, noise suppression and the provision of services. On the firm side, we consider information, financing, the market for corporate control, and diversity of opinion.
AB - There is wide variation in the structures of financial systems in different countries. We compare two polar extremes. In one, which we refer to as the 'German model', intermediaries predominate. In the second, which we refer to as the 'U.S. model', financial markets play the major role. Our objective is to contribute to a theoretical framework for the welfare analysis of comparative financial systems. The study is divided into two parts, which focus on financial services provided to households and firms, respectively. On the household side, we consider issues such as cross-sectional and intertemporal risk sharing, noise suppression and the provision of services. On the firm side, we consider information, financing, the market for corporate control, and diversity of opinion.
KW - Comparative financial systems
KW - Financial markets
KW - Intermediaries
KW - Welfare analysis
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U2 - 10.1016/0014-2921(94)00095-H
DO - 10.1016/0014-2921(94)00095-H
M3 - Article
AN - SCOPUS:0028828912
SN - 0014-2921
VL - 39
SP - 179
EP - 209
JO - European Economic Review
JF - European Economic Review
IS - 2
ER -