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Federal Reserve Bank of Cleveland
Economic Commentary
National Preferences for Bank or Market Financing
Raj Aggarwal
John Goodell

This article examines the reasons some countries favor bank-based financial systems and others favor markets-based financial systems. We show that when societies are more accepting of ambiguity—and by extension are more trusting—market financing is favored over relationship-based collateral financing by banks.

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Raj Aggarwal & John Goodell, "National Preferences for Bank or Market Financing" , Federal Reserve Bank of Cleveland, Economic Commentary, issue May, 2016.
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Keywords: Financial Systems; Banks; Financing
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