Abstract: Among so many factors affecting the establishment of the financial system structure of a country or a region, culture as a key factor is playing a significant role. Beginning from the two paths of values and legal systems, this paper conducts a deep analysis of the inner mechanism of culture affecting the financial system. On this basis, it applies the model of feasible generalized least squares (FGLS) and the generalized method of moments(GMM) to perform an empirical test of the related data of 45 countries or areas from 1989 to 2011. The results show that those countries advocating“collectivism”with higher degree of risk aversion would be prone to choosing “bank-based”financial system; conversely, those countries advocating“individualism”with lower degree of risk aversion would tend to build“market-based”financial system. Besides, the civil law countries influenced by“rationalism”prefer“bank-based”financial system because they emphasize national interest and have poor ability to adapt to the environment; whereas the common law countries affected by “liberalism”are prone to establishing“market-based”financial system owing to their emphasis on personal rights and having good ability to adapt to the environment.

Key words: culture; individualism versus collectivism; risk aversion; legal system; financial system structure