The Future of Banking

The Future of Banking

The Future of Banking

The Future of Banking

Synopsis

The basic functions of banking--lending, deposit taking, and making payments--are constant. What changes are the forms banking takes in response to increases in competition, globalizaion, new laws, and emerging technologies. Among the most visible of these changes will be an increase in the consolidation and globalization of banking in the world's major trading countries. Now, prestigious academics and practitioners, including regulators from around the world, join Benton E. Gup in exploring these coming changes--and by doing so, define a global perspective on banking's future. They find that the consolidation of banking will persist on a global scale. Electronic banking in all its forms will increase in importance, and banking in mature economies will be even more different from what it is now in developing economies. While focusing on the financial system in the United States, Gup's panel of contributors also explores financial systems in Europe, Asia, and elsewhere. Like Gup, they predict thata small handful of very large banks will control a disproportionate share of bank assets. Their views provide an unusual survey of current thinking in the domains of banking and finance, and an important source of current information, background, and foresights for banking and finance practitioners, students, and academics.

Excerpt

This is the fifth in a series of books published by Quorum Books which began with one about bank failures (Bank Failures in the Major Trading Countries of the World, 1998) and continued with International Banking Crises (1999), The New Financial Architecture (2000), and Megamergers in a Global Economy (2002). The first book was a result of research done while I was at the Office of the Comptroller of the Currency in connection with the Gramm-Leach-Bliley Act. As that book was being written, a financial crisis began in Thailand, and then it spread around the world, providing interesting fodder for research. While working on books about failures and banking crises around the world, it became clear to me that bank regulation was not effective in preventing either failures or crises and that changes must be made in a new financial architecture. One of the more visible changes was increased consolidation and megamergers. The next topic dealt the outcomes of these and other events. Thus, this book is about the future of banking in the broad sense of that word.

It is obvious that banks are evolving in response to changes in competition, globalization, laws, technology, and other factors. Nevertheless, the long-run effect of these factors on banks and financial systems is not clear. Will banks and other financial service firms continue to consolidate on a global basis? Will electronic banking become the dominant form of retail banking? Will nonbank competitors replace banks? These are a few of the questions that are addressed here.

This book consists of a collection of writings by academics, practitioners, and regulators from around the world who were asked to give their perspective of the future. The chapters cover such diverse topics as banking laws, electronic banking, microcredits in poor countries, relationship lending, stock exchanges

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