Three essays about inefficiencies in the financial industry.

Summary This thesis analyzes three types of inefficiencies in the finance sector. The first concerns the labor market. Wages in finance are high relative to other sectors of the economy. I develop a theoretical model that shows that, in a sector where profits are very sensitive to talent, this wage surplus may be the result of inefficiencies in the recruitment and selection of talent. The exploitation of data from a survey on engineers' salaries in France confirms the empirical predictions of the model: the variance of salaries in the finance sector is high, and above all, the salary surplus is largely explained by size effects. The second paper of the thesis analyzes the debt structure of small firms in a context of non-exclusive competition. Loans are offered simultaneously by lending institutions, the firm may accept one or more of them, and these institutions do not observe the set of loans chosen by the firm. Two types of institutions are in competition: the banks that "control" the firm, for example by guiding it in its investment decisions, and the more informal institutions that have no access to information or means of control. The "control" exercised by the banks makes it possible to reduce the problems of moral hazard, but at a cost that can be prohibitive. For example, I find that smaller firms do not have access to bank loans and are only offered loans from informal institutions. The share of debt financed by banks increases as the size of the firm increases, while interest rates, and the profits of lending institutions decrease. The third paper of the thesis shows how financial innovation by increasing product complexity can be a way to reduce competition and exploit the low financial sophistication of retail investors. Using a database of all structured products marketed in Europe since 1996, we construct three measures of product complexity. Each of these measures shows the dramatic increase in complexity in this market. This complexity is higher when competition is more intense, decreases when the target investor has a more developed financial education and corresponds to a structuring strategy at lower cost for the bank.