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Universal Banking and the Development of Secondary Corporate Debt Markets: Lessons from 1830s Belgium

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  • Stefano Ugolini

    (Graduate Institute of International and Development Studies (Geneva))

Abstract

This paper proposes a reassessment of the old-age debate on universal banking and growth by putting it on a different plan. Modern financial economics are used to provide new theoretical foundations to Gerschenkron’s (1962) hypothesis: universality is interpreted as a strategy for banks to reach the critical size needed in order to perform successful securitization of corporate debt. A relevant natural experiment in universal banking and industrialization (Belgium in the 1830s) illustrates the argument. The conclusion is that creating a new financial market also implies establishing intermediaries to supply crucial functions such as underwriting, certification, and liquidity provision.

Suggested Citation

  • Stefano Ugolini, 2010. "Universal Banking and the Development of Secondary Corporate Debt Markets: Lessons from 1830s Belgium," Working Paper 2010/21, Norges Bank.
  • Handle: RePEc:bno:worpap:2010_21
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    File URL: https://www.norges-bank.no/en/news-events/news-publications/Papers/Working-Papers/2010/WP-201021/
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    References listed on IDEAS

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    Cited by:

    1. Hautcoeur Pierre-Cyrille & Riva Angelo E., 2013. "What Financiers Usually Do, and What We Can Learn from History," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(3), pages 1-19, April.

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    More about this item

    Keywords

    Universal banking; stock markets; intermediation; financial development;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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