This Policy Research Report is the result of a generation of research based on statistical data from around the world. This book provides an integrated view of how financial sector policy can be optimised in the new century. It concludes that policy choices need to create and support the infrastructure which is essential to the efficient functioning of financial markets. Authorities must work with the market to help coordinate private incentives with public interest. The book focuses on making finance effective in delivering growth, preventing and minimizing crises, on government failure in finance, and on harnessing the potential of a technology-driven world of finance without frontiers.