alexa Noninterest Income Generating Activities and the Future of Banking

ISSN: 2168-9458

Journal of Stock & Forex Trading

  • Perspective Article   
  • J Stock Forex Trad 2014, Vol 3(3): 125
  • DOI: 10.4172/2168-9458.1000125

Noninterest Income Generating Activities and the Future of Banking

*Corresponding Author:

Received Date: Nov 30, -0001 / Accepted Date: Nov 30, -0001 / Published Date: Mar 31, 2000

Abstract

Firms’ financial structure has changed drastically over the last decades. Entrepreneurs can get access to direct financing much more easily than they used to. With accelerating financial innovation, this better access to financial markets coincides with financial deepening, and it importantly contributes to disintermediation. To accommodate this structural mutation, banking regulation has adapted. It now allows financial institutions to be much more involved in market-based activities (e.g., securitization, investment banking and trading). Consequently, the banking landscape has completely mutated compared to the traditional model of the seventies. This paper discusses the implications of such a change for the future of banking, with a particular focus on the challenges related to macroprudential policies and tools, as they currently stand, and as they are likely to evolve to fulfil their role – i.e., optimally -- in monitoring and supervising bank systemic risk.

Keywords: Financial innovation, Financial deepening, Disintermediation, Banking regulation, Market-based banking, Bank systemic risk

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