Banking in the early stages of industrialization a preliminary survey

Abstract

Abstract The functions performed by financial institutions, and the specific manner in which they perform them, vary according to the circumstances of time and place. Many factors—political, economic, perhaps even geographic—affect their character. It is easy, for example, to recognize what we might call ‘national styles’ in the financial structures of different nations, due largely to political and other historical circumstances more or less unique to each nation. On the other hand, the character of the economic demand for their services will go far toward determining the character of the institutions. Specifically, the demands placed on the financial sector by an economy undergoing rapid industrialization will differ from those in both highly industrialized economies and agrarian, pre-industrial economies, with consequent implications for differences in financial structure and function. It should also be recognized, of course, that the manner in which financial institutions perform their functions constitutes an important determinant of the rate and direction of economic growth.