This paper considers whether financialization is a necessary stage of financial modernization. It argues that comparisons of financial systems should not stop at the structural distinction between bank finance and market finance, or between indirect and direct finance. Instead, they should examine how credit is identified, recognized, constrained, and circulated, and how credit risk is allocated. A bank-centered system produces credit through relational trust, organizational review, continuous monitoring, and the internalization of risk. A financialized system expands credit circulation through standardization, assetization, securitization, and market transactions. Evidence from Germany, Japan, China, and the United States suggests that bank-centered finance and financialization are not lower and higher stages of the same developmental path, but two different modes of credit organization. The key issue in financial modernization is not a choice between banks and markets, but how institutional boundaries are reorganized between credit embeddedness and credit mobility.