The role of banks (original) (raw)
Rapidly changing technology, financial innovation, and increased linkages among the world’s financial markets pose many challenges for commercial banks, other financial firms and markets, and their public regulators. History suggests, however, that while the challenges we face today may be unique, many are not fundamentally dissimilar from the problems others have faced in the past. For example, regulators now confront the issue of whether and, if so, how to regulate the issuance of private electronic money. In the nineteenth century, the private issuance of banknotes raised a similar regulatory question. A second example is the current problem, for banks, of increased competition from nonbank financial firms and markets that is associated with regulatory and technological change. As Eugene White points out in the first article in this Review, banks faced a similar challenge in the nineteenth century. The twenty-second annual economic policy conference of the Federal Reserve Bank of...
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