Financial Intermediation

Examines benefits & drawbacks, regulation, types, examples of pooled funds (especially mutual) by commercial & investment banks.

The menu of financial services offered by banks has grown dramatically over the past decade. This trend is based on the assumption that customers desire this type of one-stop shopping. Will bankers ultimately replace stockbrokers and insurance agents now that regulatory barriers have been removed? The trend towards banking re-regulation is a global one as more banks are looking to exploit new opportunities to maximize profits. Banks can only do so if their regulatory regime allows such exploitation. If it does not then the banks will seek some form of re-regulation to take account of the new opportunities (Fitchen 2). With regulatory barriers removed, banking institutions are moving towards adopting the one-stop shop concept where bankers are offering customers the same products ands services as stockbrokers and insurance agents.