This article examines the critical role of financial systems in modern economies, emphasizing their importance in resource allocation, risk management, capital formation, and financial stability. It highlights the differences between bank-based and market-based financial systems, with examples from various countries, and explores the trend towards convergence driven by deregulation, technological innovation, and globalization. The literature review includes key studies that underscore the positive impact of well-developed financial systems on economic growth, such as those by Levine (1997), Beck and Levine (2002), and others. The analysis compares the features and impacts of different financial systems, providing insights into the factors driving their convergence. The conclusion underscores the necessity for policymakers, financial institutions, and investors to understand these dynamics to navigate the global financial landscape effectively.

Financial systems, financial markets, financial institutions, economic development, convergence, globalization, financial stability, banking systems.

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