Bank-Based Versus Market Based Financial System: Does it Really Matter?

Abstract

There is no simple answer to the question of why financial systems and firm financing vary from country to country. The most commonly used classification for the types of financial systems is the distinction of the bank-based and market-based financial system. In the studies conducted in economics and finance literature, it can be seen that these two systems cannot reveal an absolute superiority in terms of growth and prosperity in the countries. Our analysis state that in view of the future direction of the Turkish financial system, it may be thought that efforts to establish a "hybrid financial system" that can combine the bank-based financial system and the relatively superior aspects of the market-based financial system will be better.

Keywords: Bank-based, Market-based, Mixed-system, Financial System, Turkey

DOI: 10.7176/EJBM/11-9-17

Publication date:March 31^st 2019