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Universal Banking

Author

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  • George J. Benston

Abstract

Universal banks can offer the entire range of financial services within the bank or through subsidiaries. Most countries permit universal banking. In contrast, the United States is served only by specialized banks. Universal banking, particularly in Germany, is contrasted with specialized banking with respect to their effect on financial stability, economic development, other financial institutions, concentration of political and economic power, consumer choice, and conflicts of interest. This examination, including a review of relevant empirical studies, leads to the conclusion that universal banking offers many benefits and few costs to U.S. consumers.

Suggested Citation

  • George J. Benston, 1994. "Universal Banking," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 121-143, Summer.
  • Handle: RePEc:aea:jecper:v:8:y:1994:i:3:p:121-43
    Note: DOI: 10.1257/jep.8.3.121
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.8.3.121
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    References listed on IDEAS

    as
    1. Mester, Loretta J., 1992. "Traditional and nontraditional banking: An information-theoretic approach," Journal of Banking & Finance, Elsevier, vol. 16(3), pages 545-566, June.
    2. Berger, Allen N. & Hancock, Diana & Humphrey, David B., 1993. "Bank efficiency derived from the profit function," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 317-347, April.
    3. Neuburger, Hugh & Stokes, Houston H., 1974. "German Banks and German Growth, 1883–1913: an Empirical View," The Journal of Economic History, Cambridge University Press, vol. 34(03), pages 710-731, September.
    4. 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 (IRES - Institut de Recherches Economiques et Sociales) 1990001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Berg, Sigbjorn Atle & Forsund, Finn R. & Hjalmarsson, Lennart & Suominen, Matti, 1993. "Banking efficiency in the Nordic countries," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 371-388, April.
    6. repec:ctl:louvec:1990001 is not listed on IDEAS
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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