In the last 30 years the financial systems have grown enormously: new financial instruments have been introduced, intermediaries have expanded their activity well beyond their possibility, exposure to risk has increased almost in every country. The effect of this anomalous expansion of the financial system has been an increase in the perceived systemic risk and more instability. Because of this, finance seems to have become suddenly dangerous and detrimental for growth. And despite the large body of past evidences, many have started to argue that financial development is no longer a positive factor for capital accumulation. Though it is hard to conceive a radical change in the established theory which has highlighted the benefits for the economy accruing from a developed financial system, these events have put forward the need to redefine the role of finance and financial innovation in allocating real resources. By pivoting on four main issues, the objective of the research is indeed to provide an answer to crucial questions that have emerged from recent event:1. Inequality: The increase in inequality in many countries is thought to have been caused by an abnormal increase in the financial sector. Does finance exacerbate income inequality? To what extent? Or rather easy access to credit reduces poverty, as it has been argued by orthodox theory?2. Inefficiency: By favoring some industries and sectors more than others, does an excess of growth in the financial system cause misallocation of resources? Does financial growth cause an excess in public spending?3. Instability: Does the abnormal growth of the financial sector cause instability? Is this instability amplified in a monetary union? Can more stringent regulation and stronger coordination reduce the impact of financial cycle on the economy?4. Growth and Development: Is finance and financial development really good for growth? To what extent financial development can spur growth and capital accumulation?