Introduction

Two underlying themes flow from this analysis of the U.S. financial system: 1) changes in financial structure-resulting from market forces, regulation, or deregulation-have important eeonomie eonsequenees and; 2) publie poliey deeisions about the strueture and regulation of financial institutions and markets must be based on an understanding of their eeonomie impact. The foeus in the 1980s on "eompetitive equity," "eonvenienee," and raising returns to the "eonsumer" of financial services understated the role that financial intermediation plays in a developed economy. Competitiveness, returns, and even strategies for protecting customers of financial institutions are irrelevant if the finaneial system falls to function as adynamie catalyst in promoting economie growth. Unless those who use eapital and credit prosper, returns fall and intermediaries fall.