intermediaries are better suited for low volume

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Unformatted text preview: nancial markets “tend to be efficient institutional alternatives to intermediaries when the products have standardized terms, can serve a large number of customers and are well-enough understood for transactors to be comfortable in assessing their prices . . . intermediaries are better suited for low volume products.”21 Recent regulatory changes in the United States are also alleviating the net regulatory burden by allowing FIs to move across traditional product boundaries and lines. For example, banks have been acquiring mutual funds and expanding their asset and pension fund management businesses as well as the range of their security underwriting activities. At the same time banking organizations (such as bank holding companies) are getting bigger via mergers and other forms of consolidation. Larger size accommodates this expansion in service offerings while providing an enhanced potential to diversify risk and lower (average) costs.22 As a result, bank profitability in the 20 The close links between the performance of their assets and liabilities has led...
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This document was uploaded on 03/09/2014 for the course ACC 301 at HELP University.

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