Banks as Creators and Transmitters of Information in Historical Perspective

The current paper argues that commercial banks have used the main developments in information and communication technologies of the last thirty years to specialize in both the creation and transmission of information. The ability to create financial information provides banks with an important strategic advantage that widens as technological innovations allow for an increase in the level of industrial and informational concentration among the larger banks. This concentration process takes place at the expense of the smaller banks that cannot cope with the assimilation and development of the newly introduced information technologies. A descriptive analysis illustrating how this type of structural transformation process has taken place within the evolution of the U.S. commercial banking industry is provided and its relation to the subprime financial crises studied