Report
Is the cost of financial intermediation excessive?
It is often claimed that a major problem with contemporary finance is that financial intermediation has become too costly . It is said that the levy on value added needed to cover the cost of intermediation (the transformation of household savings into financing for the economy) is too high, in particular because the pay received by the people who work in finance or the profits of financial intermediaries themselves are too high. If financial intermediation is indeed too costly , the cost of capital - the cost of financing investment - will be abnormally high, resulting in less investment and lower long-term growth. We examine how the cost of financial intermediation has evolved in OECD countries relative to the size of the intermediation carried out . We find that this cost has fallen (relative to the size of intermediated savings) over the past 30 years, which is reassuring.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.