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The changing borders of banking: trends and implications

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  • Claudio E. V. Borio
  • Renato Filosa

Abstract

The paper outlines the evolution of the financial industry across industrialised countries since liberalisation gathered momentum in the 1980s and assesses its implications for prudential regulation and supervision, paying particular attention to changes in the degree of compartmentalisation between (commercial and investment) banking, insurance and non-financial business activities. Two key conclusions are highlighted. First, as segmentation has weakened, the compartmentalisation of prudential regulation and supervision has come under pressure. At the same time, how far harmonisation in prudential arrangements can, or indeed, should, be extended remains a moot question. Second, the changes have also put a premium on the need to find an appropriate balance between official and market discipline. The scope for improvement in this area should not be underestimated. It is argued that information disclosure should be strengthened and capital standards upgraded.

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Bibliographic Info

Paper provided by Bank for International Settlements in its series BIS Working Papers with number 23.

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Length: 42 pages
Date of creation: Oct 1994
Date of revision:
Handle: RePEc:bis:biswps:23

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  1. Steinherr, Alfred & Huveneers, Christian, 1990. "Universal Banks: The Prototype of Successful Banks in the Integrated European Market? A View inspired by German Experience," Discussion Papers (ECON - Département des Sciences Economiques) 1990001, Université catholique de Louvain, Département des Sciences Economiques.
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  9. Gertler, Mark, 1988. "Financial Structure and Aggregate Economic Activity: An Overview," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(3), pages 559-88, August.
  10. Mark Carey S. & Stephen Prowse & John Rea & Gregory Udell, 1993. "The economics of the private placement market," Staff Studies 166, Board of Governors of the Federal Reserve System (U.S.).
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Cited by:
  1. Leonardo Gambacorta & Adrian van Rixtel, 2013. "Structural bank regulation initiatives: approaches and implications," BANCARIA, Bancaria Editrice, vol. 6, pages 14-27, June.
  2. Taylor, Michael & Fleming, Alex, 1999. "Integrated financial supervision : lessons of Northern European experience," Policy Research Working Paper Series 2223, The World Bank.
  3. Renato Filosa, 1995. "Money demand stability and currency substitution in six European countries (1980-1992)," BIS Working Papers 30, Bank for International Settlements.
  4. Cybo-Ottone, Alberto & Murgia, Maurizio, 2000. "Mergers and shareholder wealth in European banking," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 831-859, June.
  5. Honohan, Patrick & Vittas, Dimitri, 1996. "Bank regulation and the network paradigm : policy implications for developing and transition economies," Policy Research Working Paper Series 1631, The World Bank.

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