CHAPTER 4. The Financial System and Growth
Author:
Mr. Christian H. Beddies
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Mr. Enrique A Gelbard
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Mr. James McHugh
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Ms. Laure Redifer
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Mr. Garbis Iradian
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Abstract

It is generally accepted that the financial system plays a pivotal role in economic development by mobilizing funds for investment projects with the highest probability of success. In fact, a well-functioning financial system is a key component of a modern economy, facilitating the exchange of goods and services, mobilizing savings, allocating scarce resources, mitigating market imperfections, and helping to diversify risks.44