Universal Banks

  • Universal banks would fall in between, given their split of business between commercial and investment banking.  (p14)

2011 12 - IMF - Estimating the Costs of Financial Regulation, IMF Staff Discussion Note - 41p

  • 1994 - Book - Universal Banking in the United States: What Could We Gain? What Could We Lose?, by Anthony Saunders and Ingo Walter
    • 1994 - AP - Universal Banking in the United States: What Could We Gain? What Could We Lose?, by Barry P. Keating - [1p-print-link] 
      • The risks associated with each of the "nonbank" activities (i.e., life insurance, property and casualty insurance, and securities activities) which might reasonably be undertaken by a universal bank is examined. Comparisons or correlations are drawn between standard banking activities and the expanded set of activities suggested by Saunders and Walter. Merger simulations using actual firm data are presented in order to explain their conclusions.
      • The conclusions are relatively simple. First, there is actually the possibility of risk reduction as opposed to risk enhancement as a result of universal banking; secondly, the main source of risk reduction would seem to be from allowing banks to expand into insurance activities rather than securities activities; finally, the authors admit that their results may exaggerate the risk-reduction benefits and that their study also cannot account for economies of scope, scale and other synergies which may result from the expansion of banking activities.
      • In short, while Saunders and Walter recognize that Congress has little appetite for bank reform and would be happy to simply refill the deposit insurance coffers, they believe that the time for universal banking has come and the United States will only hurt itself the
        more if it continues its archaic separation of activities rules.