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Finance vs. Wal-Mart: Why are Financial Services so Expensive?

"In the absence of evidence that increased trading led to either better prices or better risk sharing, we would have to conclude that the finance industry's share of GDP is about 2 percentage points higher than it needs to be and this would represent an annual misallocation of resources of about $280 billions for the U.S. "
Thomas Philippon New York University

Abstract.

Despite its fast computers and credit derivatives, the current financial system does not seem better at transferring funds from savers to borrowers than the financial system of 1910.

Read the full paper from the Russell Sage Foundation

Finance vs. Wal-Mart: Why are Financial Services so Expensive?