Jan Greitens

• The question of the optimal design of financial systems, whether more bank-based or more market-based, has a long history. Four phases of the discussion can be distinguished: Before World War I, in the rivalry between Germany and England, the debate begins. Across the spectrum, from the liberal Adolf Weber to the Marxist Rudolf Hilferding and the eclectic Joseph Schumpeter, comparisons were made, and the heterogenous authors arrived at similar assessments. During the Cold War, in contrast to the Soviet-Russian model, Alexander Gerschenkron’s depiction with the advantages of backwardness became influential. After the 1990s and in line with the Varieties of Capitalism approach, the discussion led by Ross Levine resulted in a consensus where different financial systems were embedded in their broader institutional context. The current discussion attempts to prove the superiority of capital markets, pointing to the American system as example.