Question

What are the roles of universal bank in the modern world nowadays? Please give some proofs in some big universal banks in US.

Answer 1

Universal banking is a system in which banks provide a wide variety of comprehensive financial services, including those tailored to retail, commercial, and investment services. Universal banking is common in some European countries, including Switzerland.

• Universal banking is a term for banks that offer a wider variety of services than their competitors, or when compared with traditional banks.
• Universal banking is not yet common in the United States, but it's growing; right now, banks in the United States focus more exclusively on investments than their European counterparts.
• Banks in a universal system may still choose to specialize in a subset of banking service, even though they technically offer much more to their client base.

Due to strict regulation, the universal bank has been slow to grow, encountering resistance before it is able to be a common occurrence within the United States. This is due to the Glass-Steagall Act of 1933.

Recent developments have removed a number of the barriers to the creation of a universal bank, though they are still not as prevalent as they are across many European countries. Further, the United States has banks that focus purely on investments, which is highly uncommon in the rest of the world.

The 2008 financial crisis led to a number of failures within the investment banking system in the United States. This led to the acquisition or bankruptcy of a variety of institutions. Some notable examples include Lehman Brothersand Merrill Lynch.

That said, many financial services providers in the U.S. today offer a range of services from banking, loans, mortgages, insurance, and investments either under one roof or through an affiliate network with partner firms.