Universal Banking and the Development of Secondary Corporate Debt Markets: Lessons from 1830s Belgium

Stefano Ugolini

No 2010/21, Working Paper from Norges Bank

Abstract: This paper proposes a reassessment of the old-age debate on universal banking and growth by putting it on a different plan. Modern financial economics are used to provide new theoretical foundations to Gerschenkron’s (1962) hypothesis: universality is interpreted as a strategy for banks to reach the critical size needed in order to perform successful securitization of corporate debt. A relevant natural experiment in universal banking and industrialization (Belgium in the 1830s) illustrates the argument. The conclusion is that creating a new financial market also implies establishing intermediaries to supply crucial functions such as underwriting, certification, and liquidity provision.

Keywords: Universal banking; stock markets; intermediation; financial development (search for similar items in EconPapers)
JEL-codes: G24 G32 N23 O16 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-11-23
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2010_21

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