Financial innovation and economic growth

Abstract

This article develops the precedents and results of the current global financial system, contemplating that in the last three decades, it has experienced profound institutional changes, creating non bank entities that blur the line between the activities of investment and commercial banking. The global financial system has been converted into a huge capital market, with both national and international markets operating under constantly evolving structures. In the first section, dominant characteristics of the financial system in developed countries are presented. In the second section, the specific characteristics of the financial markets of developing countries are examined, with specific focus given to the Mexican financial system. The third section analyzes the effects of liquidity on the availability of credit, and the fourth and last section offers relevant conclusions.