ABSTRACT
This chapter examines the role of the financial system in an economy undergoing substantial and rapid economic changes in its basic structures: the Brazilian economy in the period of the import substitution process. The national financial system was, since its beginning, based on banks. Those banks grew, however, without the simultaneous support of a capital market to provide funding. In this way the short-term character of the whole system was accentuated and this, later on, put extra pressures on the possibilities of stable growth of the economy. The most common analysis of the role of financial systems in the regional spheres is the analysis of the ratio loans/deposits of each region and the comparison of this ratio to the national average. Normally it is assumed that the position of a specific region above the national average is a sign that it is a net receiver of financial resources.
