The United States government enacted the Banking Act of 1933, commonly known as the Glass-Steagall Act, at least partially in an effort to calm fears stemming from bank failures during the Great Depression. While there has been a recent debate concerning the historic realism of characterizing...

This paper investigates the effect of one change in the financial sector, namely, the growing ease with which assets created by the banking sector can be sold to other investors. Of interest is whether this reduced cost of value communication leads to higher levels of risky lending by the...

This paper analyzes the difficulties associated with bank regulation and deposit insurance in a unified Europe. The authors argue that the EEC will require a high degree of financial policy coordination among member states, not only as to nominal bank deposit insurance pricing, but also in...

The authors describe the function of intermediation in the financial sector and the role of regulatory supervision in managing the inherent structural vulnerability of the process.<p> <p>Financial intermediaries provide both a risk taking and a maturity transformation function in mobilizing savings...</p></p>

What distinguished financial institutions from other firms is the relatively small share of real assets on their balance sheets. Thus, the direct impact of financial institutions on the real economy is relatively minor. The indirect impact of financial markets and institutions on economic...

Traditional theories of intermediation are based on transaction costs and asymmetric information. They are designed to account for institutions which take deposits or issue insurance policies and channel funds to firms. However, in recent decades there have been significant changes. Although...

This paper investigates the demand by households for transaction services from the financial sector. Households buy several goods with any of several media of exchange. The households choose the medium of exchange to use for each type of good, how much of each type of medium to hold, and the...

The banking industry has experienced an unprecedented level of consolidation on a belief that gains can accrue through expense reduction, increased market power, reduced earnings volatility, and scale and scope economies. A review of the literature suggests that the value gains that are alleged...

The financial system is regulated to achieve a wide variety of purposes. However, the objective that distinguishes financial regulation from other kinds is that of safeguarding the economy against systemic risk. Concerns regarding systemic risk focus largely on banks, which traditionally have...

The role of the insurance industry in the retirement assets market is examined. The popular image of the industry as one in decline is scrutinized by drawing upon various governmental and industry data sources.<p> <p>Our examination begins with the traditional area of corporate pensions, specifically,...</p></p>