This study presents the analysis of the impact of the development of the financial system on economic growth in selected countries of Central, Eastern and Southeastern Europe. First of all, it provides an overview of previous research about the influence of the development of the financial system on economic growth. Theoritical research shows that, as a result of risk aversion and the information asymmetry between borrower and lender, it motivates the existence of financial intermediaries and financial market. Differences in the development of the financial system in the observed countries provide an explanation for the different effects on capital accumulation and technological innovation which are basic and the main determinants of sustainable long-term economic growth. From an empirical point of view, this research has deepened the existing research strategies through representation and critical review of previous studies, the analysis of the functions of the financial system and the availability of data and identification of specific channels through which the development of the financial system may affect the economic growth. Both theoretical and empirical part of this thesis has confirmed the positive effect of the development of the financial system on economic growth. Special focus is suggested to economic policy holders to take the development of the financial system under serious consideration through the prism of its development and impact on economic growth. Also, this thesis proposes additional directions where it is necessary to do additional research.