【正文】 l system as anirreducible whole. The notion that a ?nancial system transfers resources between households and ?rms is, of course, a simpli?cation. Governments usually play a significant role in the ?nancial system. They are major borrowers, particularlyduring times of war, recession, or when large infrastructure projects are being undertaken. They sometimes also save signi?cant amounts of funds. For example, when countries such as Norway and many Middle Eastern States have access to large amounts of natural resources (oil), the government may acquire large trust funds on behalf of the population. In addition to their roles as borrowers or savers, governments usually playa number of other important roles. Central banks typically issue ?at money and are extensively involved in the payments system. Financial systems with unregulated markets and intermediaries, such as the US in the late nieenth century, often experience ?nancial desire to eliminate these crises led many governments to intervene in a signi?cant way in the ?nancial system. Central banks or some other regulatory authority are charged with regulating the banking system and other intermediaries, such as insurance panies. So in most countries governments play an important role in the operation of ?nancialsystems. This intervention means that the political system, which determines the government and its policies, is also relevant for the ?nancial system. There are some historical instances where ?nancial markets and institutions have operated in the absence of a wellde?ned legal system, relyinginstead on reputation and other implicit mechanisms. However, in most ?nancial systems the law plays an important role. It determines what kinds ofcontracts are feasible, what kinds of governance mechanisms can be used for corporations, the restrictions that can be placed on securities and so forth. Hence, the legal system is an important ponent of a ?nancial system. A ?nancial system is much more than all of this, however. An important prerequisite of the ability to write contracts and enforce rights of various kinds is a system of accounting. In addition to allowing contracts to be written, an accounting system allows investors to value a pany more easily and to assess how much it would be prudent to lend to it. Accounting information is only one type of information (albeit the most important) required by ?nancial systems. The incentives to generate and disseminate information are crucial features of a ?nancial signi?cant amounts of human capital it will not be possible for any of these ponents of a ?nancial system to operate e?ectively. Welltrained lawyers, accountants and ?nancial professionals such as bankers are crucial for an e?ective ?nancial system, as the experience of Eastern Europe demonstrates. The literature on parative ?nancial systems is at an early stage. Our survey builds on previous overviews by Allen (1993), Allen and Gale (1995) and Thakor (1996). These overviews have focused on two sets of issues. (1)Normative: How e?ective are di?erent types of ?nancial system atvarious functions? (2) Positive: What drives the evolution of the ?nancial system? The ?rst set of issues is considered in Sections 26, which focus on issues of investment and saving, growth, risk sharing, information provision and corporate governance, respectively. Section 7 considers the in?uence of law and politics on the ?nancial system while Section 8 looks at the role ?nancial crises have had in shaping the ?nancial system. Section 9 contains concluding remarks. 2 Investment and Saving One of the primary purposes of the ?nancial system is to allow savings to be invested in ?rms. In a series of important papers, Mayer (1988, 1990) documents how ?rms obtained funds and ?nanced investment in a number of di?erent countries. Table 2 shows the results from the most recent set of studies, based on data from 19701989, using Mayer’s methodology. The ?gures use data obtained from sourcesandusesoffunds statements. For France, the data are from Bertero (1994), while for the US, UK, Japan and Germany they are from Corbett and Jenkinson (1996). It can be see