This paper documents the evolution of net flows of saving across sectors in six financial centers: the United States (1947-2011), the United Kingdom (1991-2010), France (1971-2011), the Netherlands (1980-2011), Germany (1995-2011), and Switzerland (1995-2011). The paper has two main goals. First, we document the evolution of the allocation of funds between financial instruments and capital accumulation at the level of aggregate sectors during the recent decades. Second, we assess whether the recent expansion of finance, propelled by financial innovation and deregulation, has corresponded to a greater need for external funds to finance the accumulation of private, non-residential capital.

We find that non-financial corporations have reduced their reliance on external finance for capital expenditures in the United States after 1980 and in the European countries in the 2000s