The Changing Borders of Banking: Trends and Implications

42 Pages Posted: 13 Dec 2005

See all articles by Claudio E. V. Borio

Claudio E. V. Borio

Bank for International Settlements (BIS) - Research and Policy Analysis

Renato Filosa

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: October 1994

Abstract

The paper outlines the evolution of the financial industry across industrialised countries since liberalisation gathered momentum in the 1980s and assesses its implications for prudential regulation and supervision, paying particular attention to changes in the degree of compartmentalisation between (commercial and investment) banking, insurance and non-financial business activities. Two key conclusions are highlighted. First, as segmentation has weakened, the compartmentalisation of prudential regulation and supervision has come under pressure. At the same time, how far harmonisation in prudential arrangements can, or indeed, should, be extended remains a moot question. Second, the changes have also put a premium on the need to find an appropriate balance between official and market discipline. The scope for improvement in this area should not be underestimated. It is argued that information disclosure should be strengthened and capital standards upgraded.

Suggested Citation

Borio, Claudio E.V. and Filosa, Renato, The Changing Borders of Banking: Trends and Implications (October 1994). BIS Working Paper No. 23, Available at SSRN: https://ssrn.com/abstract=868431 or http://dx.doi.org/10.2139/ssrn.868431

Claudio E.V. Borio (Contact Author)

Bank for International Settlements (BIS) - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Renato Filosa

Bank for International Settlements (BIS) - Monetary and Economic Department

Aeschenplatz, 1
Basel, Basel-Stadt 4002
Switzerland

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