Economic Research Forum.

الملخص EN

We develop a new model that links capital market imperfection to banking emergence and economic growth.

It is shown that the banking system emerges endogenously after a first stage of slow economic growth.

Interestingly, economic growth increases after the emergence of banking but remains under its potential level.

This is due to a credit rationing brake which decreases progressively as the economy develops.

Another finding is that a reduction of credit market imperfection reduces the credit rationing stage.