Search Results

The ‘Big Five’ banks dominated British retail banking before 1939 and provided strength and stability in the financial sector. Yet after 1945, these institutions lost their dominance as providers of domestic financial services due to the severe restrictions placed on their lending activity by government regulation and increasing competition from non-bank financial institutions. It was only after 1970, and the lifting of such regulation, that British retail banks were able to flourish once again. Yet the banks have not been without criticism. They have been the subject of several government enquiries which have queried their levels of competition and efficiency and how well they served the needs of consumers and the British economy. Moreover, the global financial crisis starting in 2007 put British retail banks under severe strain and brought the question of performance and regulation to the fore.

Offers an in-depth discussion of regulatory and competitive issues in German banking. Emphasising that regulation, market structure, and competitive conduct are deeply interrelated the authors look at bank regulation from an Industrial Organisation perspective. Special consideration is given to the three-pillar structure of German banking comprising private, public, and co-operative banking institutions as well as to the driving forces that shaped bank regulation and supervision from its beginning in 1931. To assess market structure and competition in Germany’s banking market, the available empirical evidence is carefully discussed. A concluding section points to the challenges stemming from the decision to phase out state-guarantees for public banks.

Citigroup is believed to be the top player in international retail banking because of its ability to make the most of technological advances in electronic banking. Domestically however, Sanwa Bank—which is now a member of the UFJ Group and Financial One alliance, also possesses a high rank in terms of retail banking strategies in Japan. It could be observed though that Citi accounts for Japan's highest growth consumer-market segment. This chapter examines the role of IT in consumer banking, specifically in the case of the said two banks through discussing retail banking in Japan, the development of Sanwa Bank, Citigroup's consumer operations specifically on financial services and banking industries, and the Level 3 IT support structure strategy that Citigroup practices across the globe.

Starting with an international comparison of service sector productivity published in 1992, a series of projects have been initiated by the McKinsey Global Institute and carried out in collaboration with McKinsey & Company offices worldwide and a number of academic economists. Although the emphasis of these projects has been to measure and explain productivity by industry by country for a range of service sector and goods-producing industries, another important concern has been with employment creation and the extent to which productivity increases will cause or alleviate unemployment. This chapter asks whether the results of these international comparisons cast any light on the problem of service sector output measurement. It presents case studies of five service industries: retail banking, public transport, telecom, retailing, and airlines. It describes the measurement of output and the main explanations for the resulting cross-country productivity differences. A commentary is also included at the end of the chapter.

Based on the Diamond Model, the assumption is that bank liabilities are fixed-term loans. Investors loan from the bank to ultimate borrowers so that they may delegate the monitoring role. However, in reality, retail bank liabilities consist of deposits that can be withdrawn without notice. This chapter focuses on the structure of the bank deposit, contract deposit insurance, and other ways of making the banking system run-proof. It first introduces the Dybvig and Diamond model, which is similar to the two-state model in Chapter 3, except that the preferences rather than the production outcomes are state dependent, meaning that people need early or late consumption, which depends upon which state materializes. The chapter also deals with optimal insurance, social insurance, and deposit insurance, which is a way of eliminating bank runs.

This chapter argues that with the retrenchment of the welfare state in Central Europe, just as in more developed Western countries, consumer credit has emerged as an alternative way of redistributing income towards the middle class to secure effective demand in domestic consumer markets. It presents a short history of consumer credit in the Czech Republic, Hungary and Poland, and identifies the mechanisms deployed by lenders to overcome the information asymmetry problem in three tiers of the consumer credit market: VIP banking, mass consumer credit and fringe lending. The mechanisms to evaluate loan applicants—identifying, sorting, reputation creation, and quantification—have given rise to new forms of social control and started to reconfigure social relations. Because credit reallocates income from future to present, and not, as the welfare state does, from rich to poor, its redistributive capacity is limited, yet its effect on social structure is growing.

This chapter focuses on the three Central European countries--Hungary, the Czech Republic and Poland. It details the role of multinational card networks, such as Visa and MasterCard, as well as the involvement of state and large employers in solving the market puzzles. On the credit side, market development in Central Europe was influenced by concerns about data privacy. The mechanization of credit assessment, a key technology in making credit card markets profitable, was seen as a threat to borrowers. On the payment side, all three Central European markets are already dominated almost exclusively by Visa and MasterCard. In order to further standardize, the European Union recently began to push for initiatives enabling any European citizen to get their payment card in any European country.

In the global economy, wealth serves as a yardstick that measures power and influence. However, much of the capital accumulation on which this wealth is based results from debt finance involving interest payments. Such a system brings injustices like problems of country debt and corporate insolvency. For Muslims, such economic injustices are deemed unacceptable, hence the need to develop systems of managing finance that are compatible with Qur'anic teachings and the Sharīah. Wealth creation and value preservation are some of the greatest challenges of Muslims and the Islamic World as a whole. In this regard there is a need to focus on the longer-term issues of Islamic capital accumulation and its contribution to the development of Muslim societies, including those in the West. Many of these societies remain poor, yet there is much positive experience to learn from. Wealth creation results from savings and investment, but this is most likely to be successful only if the institutions created to harness and deploy funds share the values of the societies they serve. The growing Islamic banking movement has become a global financial force, and it has the proven ability to harness funds that might otherwise be underutilised. There is a wealth of successful practice which demonstrates how adherence to religious values brings social development, and that moral financing makes good business sense. This book examines Islamic wealth creation. Topics it includes are product development, retail banking, banking efficiency, mortgages, takāful (Islamic cooperative insurance), equality finance, risk management and venture capital. The book draws on a wide range of country experiences, examining the experiences of Malaysia, Iran, Egypt and Sudan, as well as the Islamic finance of the West. Many are the result of original research involving fieldwork surveys or the analysis of primary banking and financial market data. In many of the cases the work was undertaken for successful PhD theses for universities throughout the United Kingdom, the results of which have not hitherto been published.

The main driver of new, stringent rules on bank structure was not pressure from elected officials, as the two largest UK political parties were ambiguous about the benefits of separating retail and investment banking. Instead, we argue that regulators in the Bank of England pushed strongly for ‘ring-fencing’ to address moral hazard concerns caused by too-big-to-fail banks. Despite fierce opposition from the financial industry, regulators were determined to trade up rules by actively cultivating political support through the Independent Commission on Banking (ICB) and in Parliament. At the international and EU levels, UK regulators acted as fence-sitters on banking reform for two reasons. First, unilateral reform by the US meant that it was not possible to push for an international solution with its traditional ally. Second, resistance to major structural reforms amongst several member states limited the scope for harmonization across the EU.

This chapter investigates the cyclical lending patterns of national development banks (NDBs), comparing their lending activity with that of public, foreign, and domestic private banks over the period of 1995–2014. It finds robust evidence that national development and public retail-oriented banks have counteracted the slowdown in the lending activity of private banks during crises by significantly increasing their provision of loans. This is particularly important when considering productive lending to the corporate sector. NDBs’ size, governance structure, and financial conditions are crucial in ensuring that the countercyclical response is effective in mitigating the macroeconomic effects of financial turmoil. In addition, it is important that special and innovative credit lines are designed in line with the specific needs of companies in times of crisis.

This chapter investigates the history of the ubiquitous yet banal Automated Teller Machine, or ATM. There is no single inventor of the ATM. Rather, it emerged through innovation around the globe and across the industry. In order to build a successful ATM system, engineers and bankers had to overcome challenges that ranged from security and authorization to weather-proofing electronics. This chapter surveys some of those developments. Increasingly, ATMs are being designed to offer a variety of services beyond dispensing cash. In the future, the ATM may prove to an important site of automated retail banking and consumer financial services.