The changing face of financial development

•The paper demonstrates the changing nature of the finance-growth nexus.•Financial depth is no longer a significant determinant of long-run growth.•Financial reforms have sizeable growth effects that are not always positive.•The effects of financial reforms on growth depend on how well banks are regulated.

We provide evidence from a large number of countries which demonstrates the changing nature of the finance-growth nexus. Specifically, we show that financial depth is no longer a significant determinant of long-run growth. Instead we find evidence to suggest that certain financial reforms have sizeable growth effects, which can be positive or negative depending on how well banks are regulated and supervised.