Abstract

This thesis analyzes the previous regulatory approach to bank investment activities in the United States and its effects on the banking industry, discusses regulatory changes that expanded banking powers, reviews the new legislation and potential problems in the current movement of financial reform, and suggests some solutions. Chapter II reviews previous statutory regimes on bank securities activities, including those separating traditional and investment banking under the Glass-Steagall Act and Bank Holding Company Act. The regulatory regime under the E.U. banking system is addressed to give an example of successful deregulation, by which universal banks may fully enjoy the rapid changing domestic and international financial markets. Chapter III analyzes the effects of laws governing bank securities activities. This part expresses concerns that laws separating traditional banking and securities activities have affected the competitiveness and effectiveness of commercial banks in the United States and international financial markets. These effects have largely prompted financial services reform in the United States. Chapter IV examines the well-known trend of commercial bank entering into the securities business. To some degree, banks have successfully expanded their powers in the investment banking areas through financial agency interpretations and court jurisprudence. This part also addresses the trend of investment bank acquisitions by bank holding companies, which would become important incentives for Congress to pass financial reform bills. Chapter V gives an overview of recent legislative reform on financial services, including extensive modification of the Glass-Steagall Act and Bank Holding Company Act, designed to allow banking organizations to conduct a wide range of financial services. Financial services reform has made a successful march toward financial modernization in the United States. Chapter VI addresses some comments on the remaining problems associated with current financial services reform in the United States. These potential problems include holding company structure, functional regulation, and consumer protection issues. This part also addresses the issue of international supervisory convergence, which is considered critical in crafting the appropriate regulatory regime for the expanded and diversified international banking. Chapter VII concludes that because of the growing complexity and interrelation of the American financial system, meaningful legislation should be carefully designed. While the new law has liberalized activities of banks and bank holding companies, regulators must pay attention to the safety and soundness of the financial system. This part also serves to further underscore the convergence of international supervisions, which are significantly important to ensure the safe and sound financial system.

Download

Share

COinS