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Published in:
2008 | OriginalPaper | Chapter
Judicial System and Financial Intermediation
Author : Prof. Bruno Deffains
Published in: Internationalisierung des Rechts und seine ökonomische Analyse
Publisher: Gabler
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This paper analyzes the effects of legal rules on the performance of financial systems. The central question is how both content and enforcement of legal rules may contribute to the shaping of contractual relations, especially the emergence of intermediation. The original fact is that incompleteness of law may explain why banks exist. The general idea we suggest is that in common law countries, the judge completes the law whereas in civil law countries this activity could be delegated to intermediaries like banks.