IJSSER

Title: STRUCTURE OF FINANCIAL SYSTEMS AND THEIR EFFECTS ON ECONOMIC DEVELOPMENT
Authors: Ojesh Vyas , Akshay Kapoor , Abhishek Kadu and Shivam Jha
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Ojesh Vyas1 , Akshay Kapoor2 , Abhishek Kadu3 and Shivam Jha4 1,2,3,4. Student Final year Information Technology, SVKM’s NMIMS MPSTME
MLA 8 Vyas, Ojesh, et al. "STRUCTURE OF FINANCIAL SYSTEMS AND THEIR EFFECTS ON ECONOMIC DEVELOPMENT." Int. j. of Social Science and Economic Research, vol. 5, no. 11, Nov. 2020, pp. 3414-3426, doi:10.46609/IJSSER.2020.v05i11.009. Accessed Nov. 2020. APA 6 Vyas, O., Kapoor, A., Kadu, A., & Jha, S. (2020, November). STRUCTURE OF FINANCIAL SYSTEMS AND THEIR EFFECTS ON ECONOMIC DEVELOPMENT. Int. j. of Social Science and Economic Research, 5(11), 3414-3426. doi:10.46609/IJSSER.2020.v05i11.009 Chicago Vyas, Ojesh, Akshay Kapoor, Abhishek Kadu, and Shivam Jha. "STRUCTURE OF FINANCIAL SYSTEMS AND THEIR EFFECTS ON ECONOMIC DEVELOPMENT." Int. j. of Social Science and Economic Research 5, no. 11 (November 2020), 3414-3426. Accessed November, 2020. doi:10.46609/IJSSER.2020.v05i11.009.
References [1]. Economic Growth in a Cross Section of Countries Robert J. Barro The Quarterly Journal of Economics, Vol. 106, No. 2. (May, 1991), pp. 407-443 (used to study the growth model) [2]. RAJAN, RAGHURAM G., and LUIGI ZINGALES. “FINANCIAL SYSTEMS, INDUSTRIAL STRUCTURE, AND GROWTH.” Oxford Review of Economic Policy, vol. 17, no. 4, 2001, pp. 467–482. JSTOR [3]. BIS Working Papers No 165 Stress-testing financial systems: an overview of current methodologies by Marco Sorge Monetary and Economic Department December 2004 [4]. http://unepinquiry.org/wpcontent/uploads/2015/11/Effects_of_Financial_System_Size_and_Structure_on_the_Real_Economy.pdf [5]. Próchniak, Mariusz & Wasiak, Katarzyna. (2016). The impact of the financial system on economic growth in the context of the global crisis: empirical evidence for the EU and OECD countries. Empirica. 44. 10.1007/s10663-016-9323-9. [6]. Puatwoe, J.T., Piabuo, S.M. Financial sector development and economic growth: evidence from Cameroon. FinancInnov 3, 25 (2017). https://doi.org/10.1186/s40854-017-0073-x [7]. http://itheamc.blogspot.com/2017/12/structure-components-of-financial-system.html [8]. Financial System Structure and Economic Development: Structure Matters by O. Emre Ergungor [9]. https://accountlearning.com/role-of-financial-system-in-economic-development-of-a-country/ [10]. Leonardo Gambacorta, Jing Yang, KostasTsatsaronis Financial structure and growth [11]. Neoclassical Theory of Economic Growth \| India \| Economics Article Shared by Ayesha j [12]. https://accountlearning.com/role-of-financial-intermediaries-in-economic-development/ [13]. https://accountlearning.com/reason-for-slow-growth-of-venture-capital-companies-in-india/ [14]. Financial Deepening and Financial Inclusion by Bibek Debroy
Abstract: This research aims to analyse the impact of financial system’s development and stability on economic growth. There is enough economic literature which defines well-functioning of financial system which helps to gain economic efficiency, investment and growth. It also ventures to study the relationship between the financial development and growth regarding to Indian economy. The following study findings are put to the test: 1. The dependency between financial system and rise in economy. 2. Having large financial system does not mean to rise in economy and GDP of country. This paper also emphasis on financial deepening of markets in India and other Asia pacific wealth which is generally consider as a critical enabler of economic development. The vast structure of financial system and deepening of financial system gave more access to productive investment to occur. Financial intermediation plays a vital role to improve efficiency and reaching higher real growth in country’s wealth. Increase in diversification of financial system with a mixture of small- and large-scale institutions and combination of bank and non- financial institutions will be better suited to real economic needs. However, there are many challenges faced by financial sector in form of Non- Performing Assets (NPAs) of the financial institutions i.e. banks and under developed corporate bond markets. These challenges require some attention and policy amendments.

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