THE KEY DETERMINANTS OF DEVELOPMENT OF FINANCIAL SYSTEM

Milka Grbić

doi:10.5937/Oditor1902007G

Authors

Milka Grbić Faculty of Economics, University of Kragujevac, Kragujevac, Republic of Serbia Author

DOI:

https://doi.org/10.5937/Oditor1902007G

Keywords:

financial system, political and macroeconomic environment, legal traditions, financial regulation and supervision

Abstract

The financial system is one of the most important segments of every market economy. The complexity of functioning of the financial system and the importance that it has for real business flows in the economy requires consideration of numerous factors that determine its development. Therefore, the aim of this paper is to identify the key determinants of the development of the financial system and point to their positive and/or negative effects on the performance of the financial system. Paying respect to the complexity of the stated problem, the qualitative methodology is applied, based on the dominant application of the method of analytical description. The results of the research suggest that among the most influential factors determining the development of the financial system are: political and macroeconomic environment, financial repression and liberalization, legal traditions, financial regulation and supervision and ownership structure of financial institutions.

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