Expansion of commercial banking powers . . . or, universal banking is the cart, not the horse

John H. Boyd

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

This short essay deals with universal banking in an environment in which a government safety net (for example deposit insurance) results in a moral hazard problem for banks. It argues that universal banking significantly exacerbates the problem. Specifically, universal banking extends the distortion of incentives caused by moral hazard to other sectors of the economy.

Original languageEnglish (US)
Pages (from-to)655-662
Number of pages8
JournalJournal of Banking and Finance
Volume23
Issue number2
DOIs
StatePublished - Feb 1999

Keywords

  • Bank regulation
  • Commercial banking
  • G21
  • Universal banking

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