NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Technological and Regulatory Forces in the Developing Fusion of Financial-Services Competition

Edward J. Kane

NBER Working Paper No. 1320 (Also Reprint No. r0543)
Issued in November 1984
NBER Program(s):   ME

Productlines of traditionally heterogeneous financial institutions are rapidly fusing into a homogeneous blend, institutions and market structures are reshaping themselves to lower the cost of serving customer demand for financial services.This paper contends that contemporary adaptations exploit scope economies rooted in technological change and deposit-insurance subsidies to innovative forms of risk-bearing. As they reorient work flows, financial firms are simultaneously restructuring their organizations to lower net burdens from government regulation. Alternative state and federal regulatory and legislative bodies compete vigorously for the regulatory business of developing institutional hybrids. Evolution of Federal Reserve policy toward "nonbank banks" exemplifies the process.

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Document Object Identifier (DOI): 10.3386/w1320

Published: Kane, Edward J. "Technological and Regulatory Forces in the Developing Fusion of Financial-Services Competition." Journal of Finance, Vol. 39, No. 3 , (July 1984), pp. 759-772. citation courtesy of

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