Bernard Shull - Academia.edu (original) (raw)

Papers by Bernard Shull

RePEc: Research Papers in Economics, 1998

The extent and structure of non-banking activities for commercial banks has been a long-standing ... more The extent and structure of non-banking activities for commercial banks has been a long-standing policy concern for the United States. Recently, three alternative models for the undertaking of nontraditional activities-the universal bank, the separate subsidiary of the holding company, and the operating subsidiary of the bank-have come to the fore. After reviewing the history of activity restrictions on banks and providing an analytical framework for considering the appropriate structure, we conclude that the "op-sub" approach has modest advantages, but that even it carries substantial risks and requires vigorous monitoring and enforcement.

RePEc: Research Papers in Economics, 2000

The Gramm-Leach-Bliley Financial Modernization Act went into effect in the United States in 1999.... more The Gramm-Leach-Bliley Financial Modernization Act went into effect in the United States in 1999. The Act establishes a new framework for affiliations among commercial banks, insurance companies and securities firms through "financial holding companies" and "financial subsidiaries", and establishes guidelines for entry into merchant banking. It moves financial institutions in the United States towards a system of conglomeration that has long existed in continental Europe and elsewhere in the world. This paper reviews important provisions of the new law, provides some comparisons with other countries, and draws some implications for future developments. The immediate effects of the law are not likely to be great, either in the United States or elsewhere. With respect to the integration of financial activities, it merely supports recent trends. At the same time, it requires a continued "separation of banking and commerce", precluding the establishment of true universal banks. Longer-run effects are likely to be more important. If the past is a guide to the future, whatever lines are now drawn by law and regulation between financial and commercial activities are likely to erode in the coming years.

Journal of Financial and Quantitative Analysis, Nov 1, 1974

William Gibson has presented a useful analysis of the Administration's proposals for financia... more William Gibson has presented a useful analysis of the Administration's proposals for financial reform, and I have no difficulty concluding with him that they should be passed. But, I find myself in some disagreement with him on a number of matters of interpretation.

The Antitrust bulletin, Sep 1, 1978

It has frequently been argued by those opposed to multiple-office banking that a liberalization o... more It has frequently been argued by those opposed to multiple-office banking that a liberalization of state law permitting commercial banks to establish offices in distant locations; i.e., to extend themselves geographically by branching or through holding companies, will result in increased concentration and a deterioration of competition.' Sometimes states such as Oregon, in which the two largest organizations clearly dominate commercial banking, are cited as examples of what can happen if restrictions on multiple-office banking are given up."

Journal of Post Keynesian Economics, Dec 1, 1995

In the United States, monetary functions were undertaken by the Treasury and by private organizat... more In the United States, monetary functions were undertaken by the Treasury and by private organizations of banks before the establishment of the Federal Reserve, and some would argue with better results. There is no reason to believe that, under current conditions, a central bank, however desirable as an alternative, is "necessary" and, therefore, that an independent central bank is necessary. However, there is in the United States a central bank with some degree of independence that is not likely to disappear in the foreseeable future. The practical question is how much independence is desirable? A related consideration is, what kind? These questions involve political as well as economic factors that, in recent years, have generated a good deal of heat and some light. (For relatively recent compilations of relevant articles, see Mayer, 1990, and Van Hoose, 1995). International comparisons indicate that the Federal Reserve is a relatively "independent" central bank that has delivered anti-inflationary "services" (Alesina and Summers, 1993). Monetarists, however, have argued that Federal Reserve independence is an almost insurmountable barrier to effective monetary policy and have long proposed "rules" as a substitute for "discretion." Keynesians and others, without a belief in a rigid linkage between money and aggregate economic activity, but with a concern about systemic processes and unpredictable events that connect the financial system to fluctuations in real output, have been less sanguine about tying the Federal Reserve's hands. The issue of independence has, consequently, fused with the economic

The Journal of the American Academy of Psychoanalysis, 1986

In 1915 Sigmund Freud labeled one of his metapsychological points of view the " economic" (ökonom... more In 1915 Sigmund Freud labeled one of his metapsychological points of view the " economic" (ökonomischen) standpoint (Freud, 1915A). He had earlier identified the term " economic" with the quantitative aspects of his developing theory (Freud, 1887-1902), and he period ically used it in a variety of contexts. It is not clear why Freud chose this term to characterize an aspect of his theory. Freud never offered an explanation nor is there any definitive one in the psychoanalytic literature. That the question has never seriously been raised probably reflects the fact that psychoanalysts and economists no longer read one another's literature. Suggestions have been made by Riesman (1950), Rieff (1959), and Erikson (1955) that Freud was influenced in some Zeitgeist manner by the economics of the time which emphasized the maximization of pleasure or profits in a world of scarcity. There are striking similarities and a fundamental consistency between the early ideas of Freud that developed into his economic viewpoint and the highly distinctive model of individual economic behavior that emerged from the Austrian uni versities about the same time. It is as if Freud wished to recognize the consistency and make use of the original and unique contributions of the " new" Austrian economists of his day. D r. Shull is Professor o f E conom ics at H unter C ollege, N ew Y ork C ity. D r. W arn er is S en io r A ttending Psychiatrist at the Institute o f P hiladelphia H ospital and D ean o f the P hiladelphia A cadem y o f Psychoanalysis. T his p ap er w as presented at the W in ter M eeting o f the A m erican A cadem y o f P sychoanalysis, N ew Y ork C ity , D ecem ber 9 , 1984. T his pap er has benefitted from the review and helpful com m ents o f P rofessor H erbert G ey er o f H u n ter C olleg e, C ity U niversity o f N ew Y ork.

Social Science Research Network, 2012

The Levy Economics Institute Working Paper Collection presents research in progress by Levy Insti... more The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.

Recent corporate scandals, together with the effects of globalization, have led to an increasing ... more Recent corporate scandals, together with the effects of globalization, have led to an increasing interest in corporate governance issues. Little attention has been paid, however, to international laws and recommendations dealing with corporate governance in banking from a global perspective. This impressive international set of expert contributors – academics, practitioners and regulators – remedies the lack of attention by examining the various issues and concerns of this important topic.

Social Science Research Network, 1999

The Antitrust bulletin, Sep 1, 2000

The Antitrust bulletin, Jun 1, 1996

AUTHOR'S NOTE: This article was prepared while 1 served as a Visiting Scholar in the Bank Res... more AUTHOR'S NOTE: This article was prepared while 1 served as a Visiting Scholar in the Bank Research Division of the Office of the Comptroller of the Currency (OCC). 1 wish to acknowledge the helpful comments ofLarry Mote of the acc, Stephen Rhoades of the Board of Governors, Federal Reserve System, Michael Greenspan of Thompson & Mitchell, and Paul Horvitz of the University of Houston; and also of Philip Bartholomew of the OCC on an earlier version.

The Antitrust bulletin, Mar 1, 2002

Journal of Banking and Finance, 1994

This review traces the changing relationship between banking and commerce in the United States, f... more This review traces the changing relationship between banking and commerce in the United States, from the earliest banks through recent developments. The relationship is characterized by policy-imposed restrictions on both the 'nonbanking' activities of banks and the 'banking' activities of commercial and industrial firms. The substance of the policy has varied over the years with changes in the demarcation between 'banking' and 'nonbanking' as the result of market adaptations by banks, other firms and government, the functioning of a fragmented regulatory system, and congressional 'loopholes' that have periodically been closed when widely exploited. Persistent constraints on common control of banks and other commercial firms, and repeated government suppression of major departures from separation, has been striking in an economy that generally rewards entry into new activities to meet market demands. The roots of the policy can be found in concerns about the extension of government influence through the private banking firms which it supports to the detriment of non-affiliated commercial and industrial firms; i.e., in classic economic liberalism.

Palgrave Macmillan UK eBooks, 1996

Social Science Research Network, 2010

Regulatory forbearance and government financial support for the largest U.S. financial companies ... more Regulatory forbearance and government financial support for the largest U.S. financial companies during the crisis of 2007-09 highlighted a "too big to fail" problem that has existed for decades. As in the past, effects on competition and moral hazard were seen as outweighed by the threat of failures that would undermine the financial system and the economy. As in the past, current legislative reforms promise to prevent a reoccurrence. This paper proceeds on the view that a better understanding of why too-big-to-fail policies have persisted will provide a stronger basis for developing effective reforms. After a review of experience in the United States over the last 40 years, it considers a number of possible motives. The explicit rationale of regulatory authorities has been to stem a systemic threat to the financial system and the economy resulting from interconnections and contagion, and/or to assure the continuation of financial services in particular localities or regions. It has been contended, however, that such threats have been exaggerated, and that forbearance and bailouts have been motivated by the "career interests" of regulators. Finally, it has been suggested that existing large financial firms are preserved because they serve a public interest independent of the systemic threat of failure they pose-they constitute a "national resource." Each of these motives indicates a different type of reform necessary to contain too-big-tofail policies. They are not, however, mutually exclusive, and may all be operative simultaneously. Concerns about the stability of the financial system dominate current legislative proposals; these would strengthen supervision and regulation. Other kinds of reform, including limits on regulatory discretion, would be needed to contain "career interest" motivations. If, however, existing financial companies are viewed as serving a unique public purpose, then improved supervision and regulation would not effectively preclude bailouts should a large financial company be on the brink of failure. Nor would limits on discretion be binding. To address this motivation, a structural solution is necessary. Breakups through divestiture, perhaps encompassing specific lines of activity, would distribute the "public interest" among a larger group of companies than the handful that currently hold a disproportionate and growing concentration of financial resources. The result would be that no one company, or even a few, would appear to be irreplaceable. Neither economies of scale nor scope appear to offset the advantages of size reduction for the largest financial companies. At a minimum, bank merger policy that has, over the last several decades, facilitated their growth should be reformed so as to contain their continued absolute and relative growth. An appendix to the paper provides a review of bank merger policy and proposals for revision.

The Antitrust bulletin, Mar 1, 1983

... BY BERNARD SHULL* ... 5 See Robert J. Lawrence and Samuel H. Talley, "An Alternative App... more ... BY BERNARD SHULL* ... 5 See Robert J. Lawrence and Samuel H. Talley, "An Alternative Approach to Regulating Bank Holding Companies," in Proceedings of a Conference on Bank Structure and Competition (Chicago: Federal Reserve Bank of Chicago, 1978), pp. 2, 3. ...

Chapters, 2008

This comprehensive book contains case studies on the evolution of competition policy, with an emp... more This comprehensive book contains case studies on the evolution of competition policy, with an emphasis on merger policy, for seven major US industries that have experienced substantial deregulation in the past forty years – electricity, natural gas, telecommunications, railroads, airlines, hospitals and banking. Also included is a comparison of the EU’s experience in attempting to bring about competition in the energy, finance, and airline industries.

Social Science Research Network, 2014

The Federal Reserve has been criticized for not forestalling the financial crisis of 2007-09, and... more The Federal Reserve has been criticized for not forestalling the financial crisis of 2007-09, and for its unconventional monetary policies that have followed. Its critics have raised questions as to whom, if anyone, reins in the Federal Reserve if and when its policies are misguided or abusive. This paper traces the principal changes in governance of the Federal Reserve over its history. These changes have, for the most part, developed in the wake of economic upheavals, when Fed policy has been challenged. The aim is to identify relevant issues regarding governance and to establish a basis for change, if needed. It describes the governance mechanism established by the Federal Reserve Act in 1913, traces the passing of this mechanism in the 1920s and 1930s, and assays congressional efforts to expand oversight in the 1970s. It also considers the changes in Fed policies induced by the financial crisis of 2007-09 and the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It concludes that the original internal governance mechanism, a system of checks and balances that aimed to protect all the important interest groups in the country, faded in the 1920s and was never adequately replaced. In light of the Federal Reserve's continued growth in power and influence, this deficiency constitutes a threat not only to "stakeholders" but also to the independence of the Federal Reserve itself.

RePEc: Research Papers in Economics, 1994

Takes a multifaceted look at the major issues of interest rate risk management, including a contr... more Takes a multifaceted look at the major issues of interest rate risk management, including a controversial new tie-in to risk-based capital. This definitive text inlcudes a review of the major types of risk affecting financial institutions and the critical issues affecting financial institutions and