Bank Diversification and Financial Conglomerates in Europe

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The aim of this chapter is to provide an overview of the bank diversification into non-banking activities focusing on European conglomerates, while at the same time offering an update of studies on bank diversification. The financial conglomerates’ journey can be split in two periods by using the late 1990s as the cut off point. The chapter starts by discussing the corporate structure of financial conglomerates and then presenting the driving forces behind the evolution of these heterogeneous institutions. Then it moves on to review the theoretical arguments behind the creation of these universal banks and supports the discussion by presenting the empirical findings on the effects of product diversification in the banking sector. Finally, the discussion delves into the evolution of bank diversification into non-banking activities, while offering key statistics and a summary of key regulatory reforms. The chapter concludes the discussion by laying out some aspects of modern financial markets that require further thought and could ignite new research.
Original languageEnglish
Title of host publicationThe Palgrave Handbook of European Banking
EditorsThorsten Beck, Barbara Casu
Place of PublicationLondon
PublisherPalgrave Macmillan
Pages49-79
Number of pages30
Edition1
ISBN (Electronic)978-1-137-52144-6
ISBN (Print)9781137521439
DOIs
Publication statusPublished - 14 Jan 2017
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