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COMPARING FINANCIAL SYSTEMS AROUND THE WORLD: CAPITAL MARKETS, LEGAL SYSTEMS, AND GOVERNANCE REGIMES

COMPARING FINANCIAL SYSTEMS AROUND THE WORLD: CAPITAL MARKETS, LEGAL SYSTEMS, AND GOVERNANCE REGIMES Financial systems are generally classified as being bank-based or market-based. This paper compares the characteristics of major financial systems on the basis of financing channels, legal system, governance models, cost of debt, and shareholding structure. It explains how the financial market is dominant in Anglo- Saxon countries like Canada, the United States or Great Britain, with a common law system, a shareholder governance model, lower cost of debt, and scattered ownership. On the other hand, the banking system is predominant in continental Europe countries like France and Germany, with a code law system, a stakeholder governance model, higher cost of debt, and concentrated ownership. JEL codes: D53; E44; F36; G15; O16 Keywords: financial systems; financial markets; banking system; governance model; cost of debt http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics, Management, and Financial Markets Addleton Academic Publishers

COMPARING FINANCIAL SYSTEMS AROUND THE WORLD: CAPITAL MARKETS, LEGAL SYSTEMS, AND GOVERNANCE REGIMES

FELIX ZOGNING
Economics, Management, and Financial Markets , Volume 12 (4): 16 – Jan 1, 2017
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Publisher
Addleton Academic Publishers
Copyright
© 2009 Addleton Academic Publishers
ISSN
1842-3191
eISSN
1938-212X
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Abstract

Financial systems are generally classified as being bank-based or market-based. This paper compares the characteristics of major financial systems on the basis of financing channels, legal system, governance models, cost of debt, and shareholding structure. It explains how the financial market is dominant in Anglo- Saxon countries like Canada, the United States or Great Britain, with a common law system, a shareholder governance model, lower cost of debt, and scattered ownership. On the other hand, the banking system is predominant in continental Europe countries like France and Germany, with a code law system, a stakeholder governance model, higher cost of debt, and concentrated ownership. JEL codes: D53; E44; F36; G15; O16 Keywords: financial systems; financial markets; banking system; governance model; cost of debt

Journal

Economics, Management, and Financial Markets – Addleton Academic Publishers

Published: Jan 1, 2017

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