BANKS VS VENTURE CAPITAL AND PRIVATE EQUITY FUNDS – A SUBSTITUTE OR COMPLEMENT?
Keywords:
financial system, venture capital, private equity, bank loans, funds, banksAbstract
Throughout history, the financial systems of countries relied solely on banking institutions as bearers of financial activity and as intermediaries. However, in the recent times, the development of the financial market is being followed by other participants who partly complement, and partly crowding out banks from the financial market. Indeed, banks have expanded their activities portfolio for the sake of survival, which is resulting in an inevitable overlap of activities among financial market participants. In developed countries, institutional investors are increasing the financial market share more and more. In the developing countries market, venture capital and private equity funds have emerged in the last two decades. In Serbia, as a developing country, these funds are unjustifiably neglected. Therefore, the authors point out the importance of these funds as potential financiers and actors on the financial market. The aim of this paper is to determine whether venture capital and private equity, considering European countries, subtract the market participation of banks or simply complement the financial flows that banks can not or do not want to cover?
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