Beschreibung:
The consequences of diversity over a number of pertinent dimensions is often not adequately acknowledged in economics. As Reinhard H. Schmidt (in this issue) states: “One could easily cite important recent research contributions with no traces of institutions and institutional differences of any kind and instead just one ‘representative agent’ living and operating in an institution-free idealized economic environment, an environment without any diversity.” In reality, however, institutional variety, via its impact on incentives and cost of transactions, obviously has a defining bearing on economic outcomes. This perspective has been stressed by the new institutional economics. The relevance of institutional variety has also been acknowledged in finance (Allen and Gale 2000, Levine et al. 1999), this always held true for economic historians, here Gerschenkron is one of the best-known examples. In the “purer” domains of economics, however, for a long time, research revolved largely around the rather simplistic and binary comparison between bank-based versus market-based financial systems. The Great Financial Crisis has relaunched interest in the debate on the comparative efficiency of financial institutions (intermediaries as well as markets). Interestingly, whereas institutions betting on newfangled instruments fared badly, “boring” banks performed rather well. Of course, they could not escape second-round effects. But they have proven to be more resilient. This also held true at a systemic level. Here, institutional variety has apparently proven beneficial. Given this background, it is somehow surprising that, although the interest in the importance of institutional diversity for the functionality of financial systems has increased, research is still scarce and work on the topic is still pioneering. Therefore, the aim of this issue is to motivate and pave the way for more research on institutional diversity in banking and finance.