Securities markets are growing again. From 1980 to 1996, listed stock capitalization doubled in the United States, quadrupled in France, Germany, and the UK, and increased by a multiple of twenty-six in Portugal, though, in this case, the initial value was very low. Although most of this increase was spent recovering from two poor decades – US market capitalization, for instance, did not regain its 1961 GDP-weighted value until 1993 – the surge is sufficiently pronounced and ubiquitous enough to be considered a qualitative change.

Market growth implies a relative decline in the role of banks, with predictable redistributional effects. Disintermediation reduces the twofold capacity that the financial system has to overcome information asymmetry and insure firms against cyclical financial vicissitudes. Although there is no evidence of a “Macmillan gap” yet, the trend toward securitization has the potential to hurt firms that are small or engaged in traditional sectors. We should not be surprised, therefore, to observe that disintermediation and securitization are not pursued to the same length in all countries, but, instead, that the largest stock markets, today as prior to the Great Depression, are found in financial systems that exhibit a low degree of segmentation and in countries with centralized state structures.

Still, we should not expect the 1913 patterns to reemerge intact.