The policy debate on whether to strengthen or to remove the legal barriers between banking and commerce has paid little attention to what the practical effects of removing the barriers would be. To help answer this question, this article, the first part of a two-part study, provides an overview...

The policy debate on whether to strengthen or to remove the legal barriers between banking and commerce has paid little attention to what the practical effects of removing the barriers would be. To help answer this question, this article, the first part of a two-part study, provides an overview...

In the first part (in the previous issue of Economic Review) of this two-part study, the authors identified a number of possible benefits from combining banking and commerce, including portfolio diversification, the creation of internal capital markets, and economies of scale and scope. This...

Using hypothetical portfolios created from historical data on industry profitability, the authors demonstrate that some combinations of banks with other industries could produce higher returns on equity with less risk.

Exploring the potential effects of removing the legal barriers between banks and commercial firms, this article surveys economic theory as well as experience in other developed countries and in U.S. nonbank conglomerates.