Business Divisions from the Perspective of the U.S. Banking System

The Bank Holding Company Act of 1956 ( Act ),\u27 as amended, most recently in 1999 by the Gramm-Leach-Bliley Act ( GLB ) divides all economic activity into five groups. These groups are: 1) banking, 2) activities closely related to and a proper incident to banking; 3) activities of a financial nature; 4) activities complimentary to those of a financial nature; and 5) activities not of a financial nature. This article will explore these five groups of activities separately. The policies behind the divisions will be analyzed and questioned whether they serve the policies behind the Act. This article will also question whether the divisions make good economic sense and whether they are drawn in a logical manner. Finally, this article examines the effects that the divisions have had on the banking industry, in both the United States and abroad, and looks to what they portend for the future

Business Divisions from the Perspective of the U.S. Banking System

The Bank Holding Company Act of 1956 ( Act ),\u27 as amended, most recently in 1999 by the Gramm-Leach-Bliley Act ( GLB ) divides all economic activity into five groups. These groups are: 1) banking, 2) activities closely related to and a proper incident to banking; 3) activities of a financial nature; 4) activities complimentary to those of a financial nature; and 5) activities not of a financial nature. This article will explore these five groups of activities separately. The policies behind the divisions will be analyzed and questioned whether they serve the policies behind the Act. This article will also question whether the divisions make good economic sense and whether they are drawn in a logical manner. Finally, this article examines the effects that the divisions have had on the banking industry, in both the United States and abroad, and looks to what they portend for the future

Role of the Bank for International Settlements in Shaping the World Financial System, The

The Bank for International Settlements ( BIS ) was set up in Basel, Switzerland in 1923 to handle remaining financial issues from World War II largely having to do with German reparation payments. It was the first of the semi-public international banks. Over the years its functions have changed and, largely since the late 1970\u27s, it has served as the situs for the world\u27s central banks and financial regulators to pool ideas and deal with international financial issues. A group of committees, com- posed largely of representatives of central bankers, now meets at BIS and has been issuing memoranda and drafts of regulations on a number of subjects affecting international banking. Among these are the regulation of capital, the management of international conglomerates, and problems resulting from electronic banking. Problems in world banking have sensitized observers to the absence of coordinated regulation and to the need for some form of unified control. That there is a need for one international bank regulators increasingly acknowledged. BIS comes closer than any other organization to fulfilling this function. The International Monetary Fund ( IMF ) comes close but is too politicized and has been too involved in attempting to meet a continuing series of crises to do any long range thinking. Only BIS has attracted the intellectual resources to analyze and resolve international problems in a thoughtful and deliberate manner. Only BIS output is being adopted in the world\u27s banking centers. BIS has been proposed as a world senior financial regulator. This article acknowledges the rationale for such a decision but argues that now is not the time for such an attempt. Banking is, of course, conducted locally even though its reach is international. To anoint any body as a senior regulator with the power to impose rules would require massive compromises among national regulators to achieve one central set of rules. It would also involve an abdication of measures of sovereignty by the constituent states. An effort of this kind would risk destroying the whole concept. Rather than start such a bold stroke at such an inopportune time, this Article argues that the international banking world would fare far better assisting BIS to proceed down the current track. As it continues to mature, and as its edicts are increasingly accepted throughout the world it will continue to approach its rightful place as the world\u27s bank regulator

Is There a Dual Banking System?

There is a fierce controversy being waged today about the status of the historic dual banking system in American law. National banks (banks chartered by the national government) derive their powers from federal law. States, on the other hand, assert that they should be able to control certain aspects of national bank operations such as consumer protection written as state law. While the national banks acknowledge that states do have certain areas where they may control national bank activities--much contract law, for example, which is essentially state law--the national banks also assert a high level of authority--preemption--over the states where both national and state law have application. States assert that the degree of preemption claimed by the national banks is excessive. Our paper makes the point that this conflict is almost inevitable, given the existence of national and state banks operating in the same areas. The point of the paper is that the controversy has nothing to do with the so-called dual banking system and calling upon the name of the system to support either national or state bank authority is misleading and adds nothing to the argument. The paper goes on, however, and asserts that, given recent changes in both national and state law, the dual banking system does not exist at all in any meaningful way and resort to it clouds rather than illuminates the underlying conflict. The authors believe that national and state banks are really no more different from one another than are two national (or two state) banks. Statutes like the Federal Deposit Insurance Corporation Improvement Act of 1991 and the state “blue sky” laws are discussed in this context

Anglo American competition aspects of bank mergers

This thesis analyses the competitive aspects of bank merger transactions under the law of the United Kingdom ('UK') and the United States ('US'), including the applicable law of the European Union ('EU'). This thesis, also, covers bank mergers and competition in view of the financial crisis 2007-08 that is known as the Global Financial Crisis ('GFC'). The analysis under UK and EU law focuses on competition issues in the banking and financial sector, notwithstanding that competition laws in these jurisdictions apply broadly to all sectors of the economy. The US law analysis is based on competition law from federal antitrust and bank regulatory authorities, case law, as well as consumer protection regulation. This thesis establishes a comparative framework for understanding the competition provisions, examination methods of mergers, administrative proceedings, and case law development among the UK law, applicable EU cases, and US agencies and courts. It highlights potential improvements in the analysis of banking competition and the financial sector as whole. The ultimate goal of any proposed improvement should be to make banks and other financial institutions provide more efficient services and less costly products to consumers, while reducing systemic risk and preserving the soundness and safety of the financial system. The GFC led UK and US policy makers to introduce a number of laws and regulations aimed at addressing excessive bank risk taking and improving financial regulatory enforcement. The increasing interconnection between competition law and bank regulation means that the competition and banking regulators are well positioned to play an active and wide-ranging role. The actions taken by the UK, the US as well as other national and international bodies, upon the occurrence of the GFC, were arguably necessary and perfectly justifiable on regulatory and financial stability grounds. The GFC revealed a number of significant regulatory and central bank failures, and especially in terms of defective regulation, supervision, resolution, support and macro prudential oversight. A substantial amount of work has been undertaken to correct all of these. It is arguable that sufficient action has been taken to remove the worst threats that arise with 'too-big-to-fail'. This paper takes a comparative approach and examines the applicability of competition laws, policies, and methods in bank mergers in the UK and the US. It, also, discusses how to improve these laws, polices and methods to make them more efficient and better equipped to preserve and enhance competition in banking and financial system

The Check Clearing for the 21st Century Act-A Wrong Turn in the Road to Improvement of the U.S. Payments System

The Check Clearing for the 21st Century Act\u27 (Check 21 Act) was introduced to Congress by the Federal Reserve System, enacted by Congress, signed by the President on October 28, 2003, and became effective one year later, on October 28, 2004. It makes a modest change in the check-clearing system designed to speed the movement of checks from the depositary to the paying bank. It is anticipated that it will eventually lead to what is called electronic presentment, a process that may make the clearing of checks almost as swift as today\u27s electronic payment systems. In this way, the Federal Reserve has given a kind of imprimatur to the checking system and added to its life. The checking system iseven with the Check 21 Act modification-the oldest, slowest, most expensive, and easily the most complex of the payment devices in use. Checking has its roots in the Middle Ages2 where, along with the bill of exchange and early forms of promissory notes, checks were traded in the fourteenth century merchant fairs and litigated in the merchant pied-poudre courts. The device moved indoors in the eighteenth century largely through a series of cases before the King\u27s Bench and decided by stellar judges such as Lord John Mansfield. The law was codified in the English Bills of Exchange Act of 1882 and received in the United States in the first uniform law, the Uniform Negotiable Instruments Law of 1895. Checks are currently governed by four different laws: Article 3 of the Uniform Commercial Code (U.C.C.), Negotiable Instruments; U.C.C. Article 4, Bank Deposits and Collections; 12 C.F.R. pt 210 [hereinafter Regulation J], and 12 C.F.R. pt. 229 [hereinafter Regulation CC]. The interrelationship of these laws almost defies understanding. Starting about ten years ago, both the number and the volume of checks started to decline.5 Simpler, cheaper, and faster payment devices like credit and debit cards, and electronic payments, including internet payments and the Automated Clearing House system, were gradually replacing checks as the payment systems of choice. It was widely anticipated that checks would simply phase out of use and become an ugly memory. Through the Check 21 Act, the Federal Reserve has stalled this evolution and given new life to the checking system

Is There a Dual Banking System

There is a fierce controversy being waged today about the status of the historic dual banking system in American law. National banks (banks chartered by the national government) derive their powers from federal law. States, on the other hand, assert that they should be able to control certain aspects of national bank operations such as consumer protection written as state law. While the national banks acknowledge that states do have certain areas where they may control national bank activities-much contract law, for example, which is essentially state law-the national banks also assert a high level of authority-preemption-over the states where both national and state law have application. States assert that the degree of preemption claimed by the national banks is excessive. Our paper makes the point that this conflict is almost inevitable, given the existence of national and state banks operating in the same areas. The point of the paper is that the controversy has nothing to do with the so-called dual banking system and calling upon the name of the system to support either national or state bank authority is misleading and adds nothing to the argument. The paper goes on, however, and asserts that, given recent changes in both national and state law, the dual banking system does not exist at all in any meaningful way and resort to it clouds rather than illuminates the underlying conflict. The authors believe that national and state banks are really no more different from one another than are two national (or two state) banks. Statutes like the Federal Deposit Insurance Corporation Improvement Act of 1991 and the state blue sky laws are discussed in this context

Speculation on the Future of the Bank for International Settlements, A

Financial crises around the globe place countries at risk. Not only do less developed countries like Mexico and Argentina tremble from the inadequacies of their banking systems, but large and developed economies such as Japan suffer similar apprehension. As a result, national financial authorities find themselves looking for a type of international financial entity that can coordinate the efforts of these authorities in maintaining safety and soundness in their respective financial and banking sectors. This being the case, financial markets need the assistance of an international institution that can regulate national banking systems and, in return, can avoid any future financial crisis. Many ideas regarding the form and mission of a new international financial architecture already exist. Out of all the suggestions presented to the world financial community, the most appealing is creating a new World Financial Authority. However, attempts to develop a World Financial Authority proved unsuccessful, and this goal remains unfeasible. Because the world is composed of scores of independent regulatory regimes, it is unrealistic to expect nations to unite behind a singular government or multinational entity. Therefore, this article addresses one of the most difficult questions facing the Twenty-First Century: what is the degree of regulation that should be imposed upon a free enterprise society that will yield the benefits of economic freedom and control? It will be argued that unlike creating a new organization, for which conditions seem unripe at the present or near future, the transformation of current international financial and banking institutions into a World Financial Authority presents a realistic opportunity. The authors believe that the Bank for International Settlements ( BIS ) is the proper institution to further consolidate international financial stability

I mercanti "italiani" nella Spalato del secolo XV

ITALIANO: Il saggio intende analizzare la presenza mercantile italiana a Spalato nel XV secolo. Con la loro frequentazione, numerosa e assidua, gli operatori italiani non solo avevano stimolato una economia già di per sé votata al commercio e complessivamente in buona salute, ma avevano pure consentito legami organici e funzionali con le maggiori economie e finanze del tempo – in particolare Venezia e Firenze –, oltre che con i mercati di approvvigionamento del Regno di Napoli. Inoltre, si era trattato di una presenza capace di intessere relazioni profonde con le strutture socio-economiche della comunità spalatina e contrassegnata da una spiccata propensione a mettere radici in città. / ENGLISH: This essay aims to examine the Italian mercantile presence in fifteenth-century Split. The presence of numerous Italian merchants not only stimulated an economy that was already flourishing and devoted to trade: it also allowed for organic and functional links with the major economies and financial centres of the time – especially Venice and Florence – as well as with the supply markets of the Kingdom of Naples. These merchants were able to weave tight relationships with the socio-economic structures of Split’s community and furthermore exhibited a strong proclivity for establishing deep roots in the city