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

Authors
Citation
Jh. Boyd, Expansion of commercial banking powers ... or, universal banking is the cart, not the horse, J BANK FIN, 23(2-4), 1999, pp. 655-662
Citations number
10
Categorie Soggetti
Economics
Journal title
JOURNAL OF BANKING & FINANCE
ISSN journal
03784266 → ACNP
Volume
23
Issue
2-4
Year of publication
1999
Pages
655 - 662
Database
ISI
SICI code
0378-4266(199902)23:2-4<655:EOCBP.>2.0.ZU;2-M
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 ha zard problem for banks. It argues that universal banking significantly exac erbates the problem. Specifically, universal banking extends the distortion of incentives caused by moral hazard to other sectors of the economy. (C) 1999 Elsevier Science B.V. All rights reserved.