The product life-cycle theory, as developed in marketing studies, can be used as a useful tool for interpreting the development path followed by a banking system and its regulation. The theory predicts that products pass through distinct phases: first the product is introduced or launched into the market (introduction period); a period of growth follows, where sales and profits rise; eventually the market stabilises and the product becomes mature. A final phase of decline might then be experienced and the product is eventually withdrawn. By applying this scheme to banking systems and their regulators distinct stages of development can be drawn.


Banking System Real Exchange Rate Commercial Bank Foreign Bank Islamic Banking 
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© P. Bongini 2009

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