A new approach to measuring universal banking

Abstract

This paper proposes a novel measure of universal banking constructed using the relative contribution of each operating segment to total assets. Using a sample of international banks, we evaluate the extent to which our proposed metric affects banks’ profitability, stability, liquidity and capitalisation. In addition, we evaluate the implications of a more complex business model, featured by th interaction of universal banking and globalization. Results suggest that a higher degree of diversification enhances financial stability and capitalisation when the Universal Banking Index (UBI) is used as a proxy of universal banking. However, a more complex structure, conceived as the combination of universal and global business models, is associated with lower levels of capital and is less desirable from a financial stability perspectiv

Similar works

Full text

thumbnail-image

Munich RePEc Personal Archive

Provided a free PDF
oai::83166Last time updated on 7/9/2019View original full text link

This paper was published in Munich RePEc Personal Archive.

Having an issue?

Is data on this page outdated, violates copyrights or anything else? Report the problem now and we will take corresponding actions after reviewing your request.