Abstract
Since the 1930s, commercial banks in the United States have been permitted to offer only a limited range of financial services. At the same time, firms engaged in non-financial activities, as well as some in financial industries, have not been permitted to own banks. Such restrictions were intended to limit the risk of bank failure, to avoid conflicts of interest and to prevent undue concentration of financial power.2
An earlier version of this chapter appeared in Gilbert (1988). The views expressed in this Chapter are those of the author and do not necessarily reflect those of the Federal Reserve System or the Federal Reserve Bank of St Louis.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Association of Reserve City Bankers (1987) Association of Reserve City Bankers Emerging Issues Committee Proposal for a Financial Services Holding Company (March 19).
Benston, George J. (1983) ‘Economics of Scale and Scope in Banking’, Proceedings of a Conference on Bank Structure and Competition (Federal Reserve Bank of Chicago, 2–4 May) pp. 432–55.
Black, Fischer, Merton H. Miller and Richard A. Posner (1978) ‘An Approach to the Regulation of Bank Holding Companies’, Journal of Business (July) pp. 379–412.
Boyd, John H. and Stanley L. Graham (1988) ‘The Profitability and Risk Effects of Allowing Bank Holding Companies to Merge With Other Financial Firms: A Simulation Study’, Quarterly Review (Federal Reserve Bank of Minneapolis, Spring) pp. 3–20.
Boyd, John H., Stanley L. Graham and R. Shawn Hewitt (1993) ‘Bank Holding Company Mergers with Nonbank Financial Firms: Effects on the Risk of Failure’, Journal of Banking and Finance (February) pp. 43–63.
Clark, J.A. (1988) ‘Economies of Scale and Scope at Depository Financial Institutions: A Review of the Literature’, Economic Review (Federal Reserve Bank of Kansas City, September/October) pp. 16–33.
Cornyn, Anthony (1986) ‘An Analysis of the Concept of Corporate Separateness in BHC Regulation from an Economic Perspective’, Proceedings of a Conference on Bank Structure and Competition (Federal Reserve Bank of Chicago, 14–16 May) pp. 174–212.
Corrigan, E. Gerald (1987) Financial Market Structure: A Longer View (Federal Reserve Bank of New York, January).
Daskin, Alan J. and Jeffrey C. Marquardt (1983) ‘The Separation of Banking from Commerce and the Securities Business in the United Kingdom, West Germany and Japan’, Issues in Bank Regulation (Summer) pp. 16–24.
Department of the Treasury (1991) Modernizing the Financial System (February).
Eisemann, Peter C. (1976) ‘Diversification and the Congeneric Bank Holding Company’, Journal of Bank Research (Spring) pp. 68–77.
Eisenbeis, Robert A. and Larry D. Wall (1984) ‘Bank Holding Company Nonbanking Activities and Risk’, Proceedings of a Conference on Bank Market Structure and Competition (Federal Reserve Bank of Chicago, 23–25 April) pp. 340–57.
Federal Deposit Insurance Corporation (1987) Mandate for Change: Restructuring the Banking Industry (October).
Forrestal, Robert P. (1987) ‘Regulations Must Evolve Along with Financial Services Industry’, Address to the Economics Club of Connecticut, 4 December, reprinted in American Banker (23 December 1987) pp. 4–7.
Gilbert, R. Alton (1987) ‘Banks Owned by Nonbanks: What is the Problem and What can be Done about It?’, Business and Society (Roosevelt University, Spring) pp. 9–17.
Gilbert, R. Alton (1988) ‘A Comparison of Proposals to Restructure the US Financial System’, Review (Federal Reserve Bank of St Louis, July/August) pp. 58–75.
Gilligan, Thomas, Michael Smirlock and William Marshall (1984) ‘Scale and Scope Economies in the Multi-Product Banking Firm’, Journal of Monetary Economics (May) pp. 393–405.
Heller, H. Robert (1987) ‘The Shape of Banking in the 1990s’, Address before the Forecasters Club of New York (26 June).
Huertas, Thomas F. (1986) ‘The Protection of Deposits from Risks Assumed by Non-bank Affiliates’, Structure and Regulation of Financial Firms and Holding Companies (Part 3), Hearings before a Subcommittee of the Committee on Government Operations, House of Representatives, 99th Congress, 2nd Session (17–18 December) pp. 325–60.
Huertas, Thomas F. (1987) ‘Redesigning Regulation: The Future of Finance in the United States’, Issues in Bank Regulation (Fall) pp. 7–13.
Kareken, John H. (1986) ‘Federal Bank Regulatory Policy: A Description and Some Observations’, Journal of Business (January) pp. 3–48.
LaWare, John P. (1987) ‘FSHCA — The Flexible Alternative for Financial Restructuring’, Issues in Bank Regulation (Fall) pp. 25–7.
Litan, Robert E. (1987) What Should Banks Do? (The Brookings Institution).
Macey, Jonathan R., W. Wayne Marr and S. David Young (1987) ‘The Glass-Steagall Act and the Riskiness of Financial Intermediaries’, mimeo (Tulane University, November).
Rose, John T. (1985) ‘Government Restrictions on Bank Activities: Rationale for Regulation and Possibilities for Deregulation’, Issues in Bank Regulation (Autumn) pp. 25–33.
Rose, John T. and Samuel H. Talley (1983) ‘Financial Transactions Within Bank Holding Companies’, Staff Studies 123 (Board of Governors of the Federal Reserve System, May).
Spong, Kenneth (1985) Banking Regulation: Its Purposes, Implementation, and Effects (Federal Reserve Bank of Kansas City).
Tobin, James (1987) ‘A Case for Preserving Regulatory Distinctions’, Challenge (November/December) pp. 10–17.
Volcker, Paul A. (1986) Appendices to the Statement by Paul A. Volcker, Chairman, Board of Governors of the Federal Reserve System, Structure and Regulation of Financial Firms and Holding Companies (Part 1), Hearings before a Subcommittee of the Committee on Government Operations, House of Representatives, 99th Congress, 2nd Session. (22 April, 11 June, and 23 July) pp. 391–510.
White, Eugene Nelson (1986) ‘Before the Glass-Steagall Act: An Analysis of the Investment Banking Activities of National Banks’, Explorations in Economic History (January) pp. 33–55.
Editor information
Editors and Affiliations
Copyright information
© 1996 Dimitri B. Papadimitriou
About this chapter
Cite this chapter
Gilbert, R.A. (1996). A Comparison of Proposals to Restructure the US Financial System. In: Papadimitriou, D.B. (eds) Stability in the Financial System. The Jerome Levy Economics Institute Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-24767-7_10
Download citation
DOI: https://doi.org/10.1007/978-1-349-24767-7_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-24769-1
Online ISBN: 978-1-349-24767-7
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)