Reconfiguration of financial system elements to restore economic growth : the system simplicity and transformation towards state-based and corporate-based types

Abstract

Since subprime mortgage crisis of 2008, financial system has no longer driven economies; zero or small GDP dynamics was only maintained by massive sovereign borrowings. The article reviews various theoretical approaches of the financial system characteristics and elements to find its better configuration and to reshape the system as economic engine. The review relies on the main macroeconomic statistics, interpretation of some major economic events, the system diversity across major economies and on various historic analogues. The article represents an attempt to observe and combine as wide amount of information, as opposite to popular stressing of a few conventional the system types or main characteristic. Keywords: investments, savings, corporate finance, household finance, public finance, public budget, sovereign debt, corporate retained earnings, commercial banks, investment banks, stock market, public credit, trade credit, financial regulation