Commercial Banks in the Securities Business: A Review

Santos, João A. C.

doi:10.2139/ssrn.8029

Download This Paper

Open PDF in Browser

Add Paper to My Library

Commercial Banks in the Securities Business: A Review

BIS Working Paper No. 56

37 Pages Posted: 13 Dec 2005

See all articles by João A. C. Santos

João A. C. Santos

Federal Reserve Bank of New York; Nova School of Business and Economics

There are 2 versions of this paper

Date Written: December 1996

Abstract

This paper analyzes the potential effects of commercial banks' expansion into the securities business, taking into account the underlying conditions assumed by the modern literature to explain the existence of financial intermediaries. The analysis focuses on the gains claimed to emerge with that expansion, particularly the gains due to information advantages and economies of scope, and on the costs claimed to arise with it, namely, those due to conflicts of interest and risk considerations. In addition, the paper discusses how these effects depend on the corporate structure chosen by banks, and it presents the securities powers of commercial banks in the OECD countries.

JEL Classification: G21, G24, G28

Suggested Citation: Suggested Citation

Santos, João A. C., Commercial Banks in the Securities Business: A Review (December 1996). BIS Working Paper No. 56, Available at SSRN: https://ssrn.com/abstract=8029 or http://dx.doi.org/10.2139/ssrn.8029