Understanding the functioning of the financial sector--and the intermediary institutions comprising it--is of major importance in analyzing the allocational efficiency of modern economies, the sources of fluctuations within them, and the possible crises inherent in their structure of interlinkages. This collection of papers, substantial editorial, and discussions by eminent economists brings together some of the most important research in the area of financial theory from the past fifteen years.

The growth of financial intermediation research has yielded a host of questions that have pushed "design" issues to the fore even as the boundary between financial intermediation and corporate finance has blurred. This volume presents review articles on six major topics that are connected by information-theoretic tools and characterized by valuable perspectives and important questions for future research. Touching upon a wide range of issues pertaining to the designs of securities, institutions, trading mechanisms and markets, industry structure, and regulation, this volume will encourage...