Asli, while I do not doubt the importance of the financial system for economic development, your confidence in the statistic evidence that it contributes to economic growth does not seem warranted to me. Maybe I am missing something. I replicated the panel regressions in one of the key papers in this literature and showed that when conservatively done, they fail a specification test. I.e., reverse causality has not been ruled out. See A Note on the Theme of Too Many Instruments, published in the Oxford Bulletin of Economics and Statistics. In fact growth regressions are in general disrepute, which is one reason the Spence Commission, for which the paper you cite was written, concluded "We do not know the sufficient conditions for growth. We can characterize the successful economies of the postwar period, but we cannot name with certainty the factors that sealed their success, or the factors they could have succeeded without. It would be preferable if it were otherwise.