The Contemporary Transformation of the Financial System and its Consequences

The article is a continuation of the series of articles devoted to the financial system and its evolution. In this article an attempt has been made to identify the elements shaping the current financial system and their implications. The article discusses main factors and processes of contemporary financial system evolution: liberalization and deregulation, technological progress and financial globalization and the most important quantitative and qualitative consequences of these processes for the financial system. The related literature and empirical data survey show two important characteristics of the financial system. The first one is the great importance of the financial system in the national economy of developed countries. The second one is the high efficiency of financial institutions and markets and also the higher probability of financial instability