Dynamics of the financial sector structure: Long-term trends and current challenges

Abstract

Subject. The article addresses the dynamics of the largest economies’ financial sector structure in terms of long-term trends and current challenges. Objectives. The aim is to identify patterns of changes in the financial sector structure that are common to developed economies, and to trace what imbalances threaten the financial sector at present. Methods. The study rests on the methods for analyzing the structure of the financial sector. The main indicators are based on the indicator of assets of financial intermediaries, and the indicator of the volume of debt markets (loans, bonds) and stock markets. Furthermore, the elements of comparative cross-country analysis are used. Results. The paper reveals the main trends in the analysis of the structure of financial sectors of the eurozone countries and the United States, and some trends related to the Japanese economy. It shows that changes in the structure of the USA financial sector began with financial liberalization in the 1980s, and led to a radical reduction in the share of credit institutions in the assets of financial intermediaries. In Europe, this process was delayed for about 20 years, but has not yet led to the same changes as in the United States. Conclusions. The findings can be used by the Bank of Russia in designing a financial market development strategy aimed at a balanced structure that meets the modern economy requirements.