But attempts, say, to reduce interest rates to stimulate economic growth won’t succeed if for example, heavy public sector borrowing puts upward pressure on interest rates (the fiscal side) or if private 6  businesses are unwilling to take up credit as they are discouraged from pursuing export or other opportunities by too much red tape (the structural side).
Even more importantly, the financial system also plays a crucial role in capital accumulation. However, especially in highly developed economies that typically boast sizeable and sophisticated financial sectors, the role of the financial system goes far beyond that of mere capital accumulation.