What is universal banking?

Universal Banking is a financial term used to describe a bank that provides a wider range of services compared to Komerční banka. Universal banking, which is popular in Europe, can not only manage personal accounts for customers, but also subscribe to company negotiations, provide investment services and act as a broker. Universal banks, sometimes called financial supermarkets, have many supporters and casting critics throughout the financial world.

In some regions, stock and investment services have never been separated from business and credit operations. In Germany and Switzerland, for example, banks almost always offer universal services under one roof. Other countries, such as the United States, generally prefer separate investment services from normal banking, although once strong lines at the end of the 20th and at the beginning of the 21st century became quite blurred, as many banking conglomerates began to offer wider services.

Although the concept existed in PEFor centuries, universal banking has recently seen an increase as a result of the 2008 financial crisis, in which many US financial institutions failed as a result of the recession. Many investment and commercial banking groups have joined the survival of disaster and created universal banks. These mergers managed to maintain several major financial institutions above the water, although some have suggested that the connection ignored the legal resolution between commercial and investment banks that the 1933 Glass-Steagall Legislative Act.

There are many arguments about whether universal banks are good or bad for consumers and financial sector. Some argue that deposits made to the bank's commercial wing, such as personal savings or account control, help keep the bank above water if there is a poor investment decision. This is claimed by supporters, can prevent the financial crisis from maintainingFighting banks above water on the wrong market. Proponents point out that universal banking provides one -off shopping for all financial needs, limits paperwork, confusing documentation and clarification of assets and obligations by having one general account.

In Universal Banks, there is a danger that they can become too big to run properly, leading to serious supervision errors and financial disaster options if the entire bank folds. For universal banks based in smaller countries, such as Switzerland, the bank's growth may be somewhat limited by the market size. However, the massive, multinational banking groups have an almost unlimited market, and therefore the chances of incredibly growing by offering universal services. In a huge universal banking conglomerate, the command chain can be confused, the risk can be shifted to generally stable markets and the impact of failure is much greater.