Universal Banking Post Crisis: Past and Future of International Corporate and Personal Banking

Abstract

This paper reviews the characteristics of the international incursions by banks since the early 1990s, examines the implications of the US subprime meltdown crisis and ensuing credit crunch for the pursuit of international banking activities, and provides a prospective view on how banks will tend to make decisions regarding the scope of their international operations in the years to come. We conclude that banks will tend to remain loyal to a universal banking model in terms of scope of activities. But they will most likely also be forced to combine domestic leadership in a first set of financial service activities, regional or international leadership in a second, and global leadership in a third, accepting secondary market shares only temporarily, as a step towards the goal of a leading position for that service in that market.

Keywords: universal bank, consumer finance, personal banking, corporate commercial banking

JEL Classification: G18, G21, G28