Banking, limited (narrow banking)

The requirement that a bank should not be allowed to conduct all business. Experience during the Great Depression from 1929 and the global financial crisis that followed the subprime crisis in 2007 showed that universal banks often behaved like hedge funds and ended up gambling away customers’ deposits. In some cases, this drove companies, private households and even pension funds to ruin. For this reason, many experts propose – either to establish a separation banking system by law – or at least to separate the two areas of deposit business and securities business from each other organizationally by means of a Chinese Wall and – perhaps also to prohibit cross-subsidization of both areas. – See banking hospital, specialized banking system, Glass-Steagall Act, investment bank, separation banking system, universal bank.

Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/