| Author: | Chen, A. H. Mazumdar, S. C. |
| Title: | A dynamic model of firewalls and non-traditional banking |
| Journal: | Journal of Banking and Finance
1997 : MAR, VOL. 21:3, p. 393-416 |
| Index terms: | COMMERCIAL BANKS INVESTMENT BANKS HYSTERESIS REGULATIONS USA |
| Language: | eng |
| Abstract: | There has been considerable public debate in the U.S. on the need to maintain legal barriers between non-traditional and commercial banking. No theoretical model has yet been developed that investigates the joint influence of various factors such as competition, production economies and regualtory subsidies that affect the bank's incentive to undertake non-traditional activities. This study applies a stochastic control model to examine the joint effects of these factors on a bank's optimal investment decisions in non-traditional banking and develops empirically testable hypotheses. |
SCIMA