The methodology for financial systems assessment from the perspective of sustainable economic growth

This article presents the synthesis of research activities on the evaluation methodology of the financial system, including its components through the lens of the objective of ensuring sustainable economic growth. The objectives pursued in the evaluation process, the system of indicators and the necessary arguments are formulated. The authors evaluate the financial system in Israel and the Republic of Moldova, including whether its are market-oriented and sufficiently open, efficient and solid; if high standards of transparency, trust and integrity are met. Next, the relationship between the financial system and economic growth in a small open economy of Israel and the Republic of Moldova is empirically examined. The analysis is carried out using two indicators to measure the level of financial development. The first indicator is the financial depth or size of the financial intermediaries sector, measured by the monetization ratio (M2/GDP). The second indicator is the ratio of credit granted to the private sector by commercial banks as a percentage of GDP (financial intermediation ratio).