A new approach to measuring universal banking

Carmela D'Avino and Mimoza Shabani

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a novel measure of universal banking constructed using the relative contribution of each operating segment to total assets. Using a sample of international banks, we evaluate the extent to which our proposed metric affects banks’ profitability, stability, liquidity and capitalisation. In addition, we evaluate the implications of a more complex business model, featured by th interaction of universal banking and globalization. Results suggest that a higher degree of diversification enhances financial stability and capitalisation when the Universal Banking Index (UBI) is used as a proxy of universal banking. However, a more complex structure, conceived as the combination of universal and global business models, is associated with lower levels of capital and is less desirable from a financial stability perspective

Keywords: Universal banking; financial products diversification; globalization (search for similar items in EconPapers)
JEL-codes: F65 G20 G21 L22 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ban
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Related works:
Journal Article: A new approach to measuring universal banking (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:83166

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