The Institutional Investors

Abstract

Free market economies are characterised by a vast range of financial institutions. In the past legal barriers (in the US and Japan for example) or self-imposed constraints (in the UK) led certain financial institutions to confine their activities to particular markets. But with the process of deregulation and liberalisation there has been a steady erosion of these lines of demarcation so that more and more institutions now range across different markets offering a variety of financial services. For example in the UK building societies are intruding into territory that was once the preserve of the banks and vice versa. In the US there is intense pressure on the authorities to repeal the Glass-Steagall Act to allow banks to deal in securities to compete with the German and Swiss universal banks which do everything US and UK banks do but in addition are directly involved in underwriting and trading equities and bonds.