12 To be able to make these choices correctly, the financial system must “know” the corporate system. But what does financial system mean? For an Anglo-American it basically means markets, and the whole world of analysts, consultants, speculative investors and institutional investors that wheel about them. For a European, and even more for an Italian, it means banks.
Markets and banks have different ways of knowing the firms that require finance. Markets can only gather and process data. Banks, in addition to data, can acquire direct knowledge of firms. A mass of studies and analyses in the last quarter of a century have argued that a broad and sophisticated financial system is essential for economic growth.