This is the second joint CEPR and Banca D'Italia meeting. Widespread consensus has emerged that a well-developed financial system is the key to economic performance. Less clear is what are the essential building blocks of an effective financial system. Recent research emphasizes certain institutions, such as investor protection legislation and accounting standards, but also social capital and culture. This conference aims to advance the understanding of the role and relative importance of these building blocks. We welcome theoretical and empirical papers that bear on these or closely related issues. Subjects will include: 1. How do the different building blocks of a financial system interact? 2. How can the links between these building blocks and financial development be measured? 3. Is it possible to identify the channels through which various factors influence the development of financial systems? 4. How can reforms be designed to build or improve the institutions that support financial systems? 5. To what extent can the experience of successful countries be "exported" to other countries?