Handbook of Key Global Financial Markets, Institutions, and Infrastructure

Chapter 33

Global Banks and Financial Intermediaries

M. Taylor

Manama, Bahrain

Outline

Introduction

The Standard Model of Banking

Banking in the Postwar Period

The Emergence of a New Banking System

Distinctive Features of Modern Banking

Reliance on Money Market Funding

Securitization

The Growth of Off-Balance Sheet Activities

Conclusion

References

Introduction

This chapter reviews the way in which the structure of banks and the banking industry has changed over the past 30–40 years. It emphasizes that the traditional model of banks – in which they are funded primarily by (retail) deposits and make loans to the corporate and household sectors – no longer accurately describes the reality of the industry. In place of the traditional model, a ...