Banks provide vital services to the economy: mobilizing, allocating, and monitoring the use of savings, by firms and individuals; providing mechanisms for pooling and managing risks; and facilitating trade in goods, services, and securities. When banking systems perform well, for example by improving the allocation of resources, they accelerate long-run economic growth. Furthermore, better-functioning banks disproportionately help lower-income families by funneling capital to the most promising entrepreneurs, rather than to those from the most connected families. By improving the efficiency of capital allocation, better-functioning banks create a more competitive environment in which workers face more dynamic labor markets, thus enhancing the economic opportunities available to people who may never receive a loan or start a business. Recent research also finds that regulatory reforms that spur competition among banks not only improve the economy; they also lower crime, ease financing constraints, increase schooling, shrink racial wage gaps, and help alleviate mental depression. This suggests important connections between finance and prosperity.