We saw in Chapter 1 that perspectives on the nature of the financial system – how it functions, what it can and cannot do, and what interventions are or are not needed for it to perform these functions – have varied considerably, both historically and in modern times. The forces shaping these perspectives have been twofold. First, real-world events have both shaped the priorities of researchers, and set parameters of what seemed possible and what did not. Secondly, broad schools of thought have emerged within this real-world context, driven by both theoretical developments and, in some instances, by the ideological stances held by their protagonists.