He was among the first to emphasise the catalytic role of welldeveloped financial intermediaries in the process of “creative destruction”.
The efficient functioning of this Schumpeterian capital reallocation mechanism is especially relevant in advanced economies, such as the euro area, where the promotion of entrepreneurship and openness to competition are key to raising productivity and growth.17 Recent empirical research at the ECB demonstrates that the larger and more developed the financial markets are, the greater is the efficiency with which capital is reallocated across sectors.