This paper identifies, catalogues, and elaborates these issues to provide a framework for informed judgment and further investigation. It begins with a review of early restrictions on bank activities in the United States and contrasts U.S. developments with those in several other countries in which banks have not been separated from commercial and industrial firms. It, then, reviews relevant issues arising in the financial sector, commercial sector, related to central banking and supervision, and socio-political concerns. It concludes that limited banking, as it exists in the United States, and universal banking, as it exists in other countries, have differential benefits and costs. Summary evaluation based on standard cost- benefit analysis, however, presents serious difficulties.
Considerable uncertainty remains about effects in a number of areas.
Many of the costs and benefits are not quantifiable, and some that are quantifiable are incomparable. A careful review of all existing evidence, identification of gaps, and further investigation is needed. Disclaimer As with all OCC Working Papers, the opinions expressed in this paper are those of the author alone, and do not necessarily reflect the views of the Office of the Comptroller of the Currency or the Department of the Treasury. The paper is available for viewing in Adobe's PDF format. The PDF viewer is available for download free from Adobe in versions for different platforms.