Abstract
It is a commonplace that the economic environment in which financial institutions operate has changed radically in the last two decades. Technological advances in the computer and communication industries have drastically lowered the costs of transmitting and processing information and thus of executing financial transactions. Financial services products have been re-defined; the efficient scale of operation has been increased, enlarging geographical market areas. The result has been a trend toward a world-wide integration of credit and capital markets.1
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References
See introductory remarks of Governor Seger, 23rd Annual Conference on Bank Structure and Competition, Federal Reserve Bank of Chicago, May 7, 1987.
See e.g. the complex efforts to prevent foreign dollar-denominated deposits from being used to circumvent domestic monetary actions: C. Lichtenstein, U.S. Banks and the Eurocurrency Markets: The Regulatory Structure, 99 Banking L. J. 484 (1982).
FDIC Chairman Seidman, Address to National Council of Savings Institu-tions, May 13, 1987. Statement of Deputy Comptroller of the Currency Bench before the Subcommittee on International Finance of the Senate Committee on Banking, Housing and Urban Affairs, April 2, 1987.
J. Barth, D. Brumbaugh, D. Sauerhaft and G. Wang, Insolvency and Risk-Taking in the Thrift Industry: Implications for the Future, 3 Contemp. Policy Issues 1 (Fall (1985).
See, e.g., G. Kaufman, The Truth About Bank Runs (SM-87–3, Fed. Res. Bank of Chicago); B. Ely, The Big Bust: The 1930–33 Banking Collapse - Its Causes, Its Lessons (unpublished paper 2/26/87).
The classic example would be the Penn Square Bank, which failed in 1982.
R. Merton, An Analytic Derivation of the Cost of Deposit Insurance and Loan Guarantees, 1 J. Banking and Finance 3 (1977). Statement by Chairman Volcker before the Subcommittee on General Oversight and Investigations of the House Committee on Banking, Finance and Urban Affairs, April 30, 1987.
Scott, The Dual Banking System: A Model of Competition in Regulation, 30 Stan. L. Rev. I (1977).
E. Kane, Competitive Financial Reregulation: An International Perspective, in Threats to International Financial Stability (R. Portes and A. Swoboda, eds., 1987 ).
Discussions began in June 1987 with Japan’s Ministry of Finance, to attempt to bring it into the cartel. Cf. FDIC’s 9% proposal, 50 Fed. Reg. 19088 (1985); President Parry, The Bank Capital Dilemma, Federal Reserve Bank of San Francisco (1/16/87).
See, e.g., FDIC, Deposit Insurance in a Changing Environment ( 1983 ); Federal Home Loan Bank Board, Agenda for Reform (1983).
H. Baer, Private prices public insurance: The pricing of federal deposit insurance, 9 Economic Perspectives 45 ( Federal Reserve Bank of Chicago, September/October 1985 ).
But see B. Ely, Private Sector Depositor Protection Is Still a Viable Alternative to Federal Deposit Insurance, 10 Issues in Bank Regulation 40 (Winter 1986 ).
See, e.g., G. Coombe and J. Lapic, Problem Loans, Foreign Outstandings, and Other Developments in Bank Disclosure, 40 Bus. Law. 485 (1985); FDIC proposal on June 17, 1987 of a rule on disclosure of financial and other information: 12 C.F.R. Part 350.
See J. Ongman, Federal Regulation of Lending Abroad: Past History, Current Practice and Future Prospects, 17 Law Pol’y Int’l Bus. 679, 690–94 (1985).
U.S. General Accounting Office, Report on Bank Examination for Country Risk and International Lending 20 (September 2, 1982 ).
See, e.g., 12 C.F.R. §§ 20.6–10 (1987); J. Guttentag and R. Herring, The Current Crisis in International Lending (1985).
Rowe, FDIC Urges Coverage of Foreign Funds, Wash. Post, June 7, 1985, at BI.
See E. Kane, The Gathering Crisis in Federal Deposit Insurance 124–28, 148–51 (1985).
N.Y. Times, February 9, 1987, p. 22; Wall St. J., February 11, 1987, p. 6.
See U.S. General Accounting Office, 1 Deposit Insurance: Analysis of Reform Proposals 40, Table 2.4 (September 30, 1986 ).
See K. Scott, The Future of Bank Regulation, in To Promote Prosperity: U.S. Domestic Policy in the Mid-1980s (J. Moore, ed. 1984). H. Simons, Economic Policy for a Free Society 62–65 (1948); M. Friedman, A Program for Monetary Stability 65–75 (1960).
See, e.g., D. Pyle, Capital Regulation and Deposit Insurance, 10 J. Banking Finance 189 (1986).
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© 1989 Springer-Verlag Berlin Heidelberg
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Scott, K.E. (1989). Domestic Bank Regulation in a World of International Banking. In: Vosgerau, HJ. (eds) New Institutional Arrangements for the World Economy. Studies in International Economics and Institutions. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-83647-3_8
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DOI: https://doi.org/10.1007/978-3-642-83647-3_8
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