How Should Financial Institutions and Markets Be Structured? Analysis and Options for Financial System Design

17 Pages Posted: 20 Apr 2011

See all articles by George G. Kaufman

George G. Kaufman

Loyola University Chicago

Randall Kroszner

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: February 1997

Abstract

This paper analyzes the consequences of alternative financial structures for financial efficiency and stability. The focus is on the organizational structure of banks. Alternative bank structures range from `narrow banks` to broad `universal banks. ` Each banking structure is assessed in its ability to satisfy the objectives of efficiency and stability in the financial system stability, economies of scale and scope, competition, avoiding regulatory capture, conflicts of interest and political manipulation, corporate control and management of financial distress, and monetary control. No one reform is appropriate for all countries, and no single reform guarantees that the objectives will be attained or maintained.

Suggested Citation

Kaufman, George G. and Kroszner, Randall, How Should Financial Institutions and Markets Be Structured? Analysis and Options for Financial System Design (February 1997). IDB Working Paper No. 279, Available at SSRN: https://ssrn.com/abstract=1815966 or http://dx.doi.org/10.2139/ssrn.1815966

George G. Kaufman (Contact Author)

Loyola University Chicago ( email )

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HOME PAGE: http://www.luc.edu/faculty/gkaufma/

Randall Kroszner

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States
773-702-8779 (Phone)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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