This paper evaluates two theories explaining international differences in financial development: the law and finance theory and the endowment theory. The law and finance theory posits that legal traditions, particularly British Common Law and French Civil Law, influence financial development by affecting the protection of private property rights. The endowment theory argues that geographical and disease environments shape long-lasting institutions that affect financial development. Using data on 70 former colonies with British or French legal origins, the study finds that both legal systems and initial endowments are important determinants of financial development. However, initial endowments are more robustly associated with financial intermediary development than legal origin. The results show that countries with British Common Law traditions tend to have higher levels of financial development than those with French Civil Law traditions. Additionally, countries with lower settler mortality rates during colonization tend to have higher levels of financial development. The study also finds that initial endowments explain more of the cross-country variation in financial development than legal origin. The findings support both theories, but the endowment theory is more robust in explaining financial development. The paper concludes that both legal traditions and initial endowments play important roles in shaping financial development, with initial endowments having a stronger influence on financial intermediary development.This paper evaluates two theories explaining international differences in financial development: the law and finance theory and the endowment theory. The law and finance theory posits that legal traditions, particularly British Common Law and French Civil Law, influence financial development by affecting the protection of private property rights. The endowment theory argues that geographical and disease environments shape long-lasting institutions that affect financial development. Using data on 70 former colonies with British or French legal origins, the study finds that both legal systems and initial endowments are important determinants of financial development. However, initial endowments are more robustly associated with financial intermediary development than legal origin. The results show that countries with British Common Law traditions tend to have higher levels of financial development than those with French Civil Law traditions. Additionally, countries with lower settler mortality rates during colonization tend to have higher levels of financial development. The study also finds that initial endowments explain more of the cross-country variation in financial development than legal origin. The findings support both theories, but the endowment theory is more robust in explaining financial development. The paper concludes that both legal traditions and initial endowments play important roles in shaping financial development, with initial endowments having a stronger influence on financial intermediary development.