Financial System Structure and Change - 1986-2005: Evidence from the O.E.C.D. Countries

Journal of Economic Integration, Vol. 23, Vol. 4, pp. 977-1001

Posted: 21 Apr 2007 Last revised: 10 May 2009

See all articles by Angelos A. Antzoulatos

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management

John Thanopoulos

University of Piraeus - Department of Business Administration

Chris Tsoumas

Hellenic Open University

Date Written: February 26, 2008

Abstract

In this paper, we use sixteen financial indices from the World Bank's Financial Development and Structure database, to classify the O.E.C.D. countries, according to their financial system structure, in five relatively homogenous clusters for the 1996-2005 period. We also examine the changes in their financial systems for the 1986-2005 period. Our analysis is based on the 'agglomerative method', a form of hierarchical clustering that uses Ward's methodology, to identify relatively homogenous groups of countries. The findings are surprising, yet reasonable. After two decades of deregulation, liberalization and globalization, the financial systems of the O.E.C.D. countries not only differ in ways challenging the perceived wisdom that classifies them along the bank-based vs. capital-market-based norms, but additionally do not seem to converge to the second norm as is widely believed. These results warn against oversimplifications regarding financial system structure and the uncritical acceptance of policy recommendations based on them.

Keywords: Financial system structure, bank-based, capital-market-based, convergence, cluster analysis, O.E.C.D.

JEL Classification: G10, G20

Suggested Citation

Antzoulatos, Angelos A. and Thanopoulos, John and Tsoumas, Chris, Financial System Structure and Change - 1986-2005: Evidence from the O.E.C.D. Countries (February 26, 2008). Journal of Economic Integration, Vol. 23, Vol. 4, pp. 977-1001, Available at SSRN: https://ssrn.com/abstract=981722

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

John Thanopoulos

University of Piraeus - Department of Business Administration ( email )

Karaoli and Dimitriou 80
80 KARAOLI & DIMITRIOU STREET
Piraeus gr185-34, Attiki
Greece

Chris Tsoumas (Contact Author)

Hellenic Open University ( email )

Parodos Aristotelous 18
26335 Patra
Greece

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