Epilogue

The role played by the financial sector in the economy is examined in two distinct strands of research, dealing with what may be called the “hero” and “villain” sides of finance. The hero side is typically found in the mainstream literature on financial development and financial deepening where finance is portrayed as being good for the economy, boosting growth and alleviating poverty. However, some writers in the mainstream literature acknowledge that there comes a point when finance turns from a hero to a villain by retarding growth. A number of channels have been identified for how the process works. The villain side of finance is studied in the non-mainstream literature under “financialisation” and sometimes by using the terms “finance curse” and “too much finance”. In this literature, a large number of negative effects of too much finance are identified. However, even in this literature, the role played by a disciplined financial sector is acknowledged as being essential for economic activity.