Efficiency and Benefit-Cost Analysis of the Financial System
Financial intermediation arises from the need for expertise in channeling capital from savers to borrowers in the presence of transaction costs. I present a framework for measuring the overall efficiency of financial intermediation and emphasize some key challenges in applying benefit-cost analysis to finance: long-run cycles in financial activity, the burden of proof between regulators and the regulated, and the interaction between benefit-cost analysis and academic research.
"Efficiency and Benefit-Cost Analysis of the Financial System,"
Journal of Legal Studies: Vol. 43:
3, Article 4.
Available at: https://chicagounbound.uchicago.edu/jls/vol43/iss3/4