Enactment of the Gramm-Leach-Bliley Act (GLBA) in November 1999 effectively repealed the long-standing prohibitions on the mixing of banking with securities or insurance businesses and thus permits “broad banking.” Since the barriers that separated banking from other financial activities have been crumbling for some time, GLBA is better viewed as ratifying, rather than revolutionizing, the practice of banking. We attribute repeal of these prohibitions to the increasingly persuasive evidence from academic studies of the pre-Glass-Steagall era, the recent favorable experience in the United States following partial deregulation of banking activities, the experience of banking systems abroad with broader scopes for banking activities, and rapid technological change in telecommunications and data processing. GLBA generally adheres to the principle of “functional regulation,” which holds that similar activities should be regulated by the same regulator. How regulators will in practice coordinate their efforts so that the safety and soundness of the banking system is maintained efficiently remains to be seen. Broad banking companies may produce financial services at greater convenience and lower cost. Increased product diversification may simultaneously make them less prone to failure. It is unclear, however, whether continuing technological advance or any future banking liberalization will favor “one-stop shopping” via broad banking companies, or perhaps will favor delivery of the financial products and services of multiple companies through an internet portal. ________________________________ *The opinions expressed herein are those of the authors and do not necessarily represent those of the Office of the Comptroller of the Currency or of the U.S. Department of the Treasury. The authors thank Nancy Michaleski, Raymond Natter, Gary Whalen and Julie Williams for helpful comments. Forthcoming in the May 2000 issue of the Journal of Economic Perspectives. James R. Barth is Lowder Eminent Scholar in Finance, Auburn University, Auburn, Alabama, and Senior Finance Fellow, Milken Institute, Los Angeles, California. R. Dan Brumbaugh, Jr. is Senior Finance Fellow, Milken Institute, Los Angeles, California. James A. Wilcox is Chief Economist, Office of the Comptroller of the Currency, Washington, D.C. Please address correspondence to: James A. Wilcox, Chief Economist, Office of the Comptroller of the Currency, Mail Stop 2-2, 250 E Street, S. W., Washington, DC 20219; phone: (202) 874-5230; e-mail: james.wilcox@occ.treas.gov
We investigated whether in recent years banks have increased their holdings of securities at the expense of their holdings of business loans in response to short-falls of their capital relative to risk-weighted capital standards and relative to a capital standard that made no explicit allowance for credit risk. We estimated that bank credit fell by about $4.50 for each $1 that a bank's capital fell short of the unweighted capital standard. Banks that had less capital than required by the risk-weighted standard appear to have shifted away from assets with low risk weights (securities and single-family mortgages) and to have shifted toward assets with higher risk weights (commercial real estate and commercial and industrial loans). When we included both shortfall variables in a regression, shortfalls relative to the unweighted capital standard significantly affected bank credit, while shortfalls of capital relative to the risk-weighted standard did not. We found no significant effects of capital shortfalls at other, local-competitor banks on bank portfolios. Delinquencies in a given category of a bank's loans generally had significantly negative effects on that bank's holdings of loans in that category. In contrast, banks tended to increase holdings of loans in categories in which local-competitor banks were experiencing higher delinquency rates.
[ILLUSTRATION OMITTED] The prevalence of memory-related issues increases with age. So does concern about dementia. Be prepared to render the best evaluation and advice possible Many older patients are concerned about their memory. The may come into your office with a list of things they can't recall, yet they remember each deficit quite well. Anticipatory anxiety about one's own decline is common, and is most often concerned with changes in memory. (1,2) Patients with dementia or early cognitive decline often are oblivious to their cognitive changes, however. Of particular concern is progressive dementia, especially Alzheimer's disease (AD). Although jokes about senior moments are common, concern about AD incurs deep-seated worry. It is essential for clinicians to differentiate normal cognitive changes of aging--particularly those in memory--from early signs of neurodegenerative disease (Table 1, page 30 (3)). In this article, we review typical memory changes in persons age >65, and differentiate these from mild cognitive impairment (MCI), an increasingly recognized prodrome of AD. Clinicians armed with knowledge of MCI are able to reassure the worried well, or recommend neuropsychological testing as indicated. Is memory change inevitable with aging? Memory loss is a common problem in aging, with variable severity. Research is establishing norms in cognitive functioning through the ninth decade of life. (4) Controversy about sampling, measures, and methods abound, (5) and drives prolific research on the subject, which is beyond the scope of this article. It has been demonstrated that there are a few optimally aging persons who avoid memory decline altogether. (5,6) Most researchers and clinicians agree, however, that memory change is pervasive with advancing age. Memory change follows a gradient with recent memories lost to a greater degree than remote memories (Ribot's Law). (7) Forgetfulness is characteristic of normal aging, and frequently manifests with misplaced objects and short-term lapses. However, this is not pathological--as long as the item or memory is recalled within 24 to 48 hours. Compared with younger adults, healthy older adults are less efficient at encoding new information. Subsequently, they have more difficulty retrieving data, particularly after a delay. The time needed to learn and use new information increases, which is referred to as processing inefficiency. This influences changes in test performance across all cognitive domains, with decreases in measures of mental processing speed, working memory, and problem-solving. Many patients who complain about forgetfulness are experiencing this normal change. It is not uncommon for a patient to offer a list of things she has forgotten recently, along with the dates and circumstances in which she forgot them. Because she sometimes forgets things, but remembers them later, there likely is nothing to worry about. If reminders--such as her list--help, this too is a good sign, because it shows her resourcefulness in using accommodations. If the patient is managing her normal activities, reassurance is warranted. Mild cognitive impairment Since at least 1958, (8) clinical observations and research have recognized a prodrome that differentiates cognitive changes predictive of dementia from those that represent typical aging. Several studies and methods have converged toward consensus that MCI is a valid construct for that purpose, with ecological validity and sound predictive value. Clinical value is evident when a patient does not meet criteria for MCI; in this case, the clinician can reassure the worried well with conviction. Revealing the diagnosis of MCI to patients requires sensitivity and assurance that you will reevaluate the condition annually. Although there is no evidence-based remedy for MCI or means to slow its progression to dementia, data are rapidly accruing regarding the value of lifestyle changes and other nonpharmacologic interventions. …
This paper rejects the proposition that there is only a single interesting question to ask about the decade of the 1930s. It is concerned not only with the role of money in the 1929-33 contraction but also with the relative role of monetary and nonmonetary factors in the recession of 1937-38 and subsequent recovery and, in addition, with the division of nominal income change between prices and real output. New empirical evidence bearing on each of these issues is provided The results suggest that both extreme monetarist and nonmonetarist interpretations of the decade of the l930s are unsatisfactory and leave interesting features of the data unexplained. Arguing against acceptance of an extreme monetarist interpretation are (1) the inability of changes in the money supply alone to explain the severity of the initial collapse in income between 1929 and the fall of 1931, (2) the steady weakening of the correlation between changes in nominal income and money as the 1930s progressed, (3) the failure of monetary factors to explain the nature and timing of the 1938-41 recovery, and (4) the apparent absence of any tendency for the mechanism of price flexibility to provide strong self-correcting forces as required by an approach that stresses monetary rules and opposes policy activism. Arguing against acceptance of an extreme nonmonetarist interpretation are (1) the close association between the collapse in income and the lagged effect of monetary changes after the fall of 1931, (2) the milder contraction and earlier recoveries associated with the more expansive monetary policies pursued in Europe, (3) the close association between money and income in the 1937-38 recession, and (4) the failure of the price change data to adhere to the expectational Phillips curve approach imbedded in many postwar econometric models constructed by nonmonetarists.
Mevcut cesitlilik yazini agirlikli olarak fiziksel, demografik niteliklerin cesitliligi uzerinde durmus, gorev-ilintili cesitliligi goz ardi etmistir. Oysa, cesitlilige atfedilen yararlar cogunlukla gorev-ilintili niteliklerde cesitlilikten kaynaklanmaktadir. Ancak gorev-ilintili cesitlilik de her zaman kendisinden beklenen faydalari saglamiyabilir. Gorev-ilintili cesitliligin farkli bilgi ve bakis acilarinin goreve uygulanmasi sonucunu.dogurabilmesi icin iki kosulun saglanmasi gerekmektedir. Oncelikle, takim uyeleri cesitlilik yaratan farkliliklarinin bilincinde olmalidirlar. Ikinci olarak, takim uyeleri farkliliklarini yonetebilmelidirler. Bu calismanin amaci 3 soruya yanit aramaktir. 1. Takim uyelerinin gorev ilintili cesitlilik algilari zaman icinde degisir mi? 2. Cesitlilik ve catisma arasindaki iliski zaman icinde nasil degisir? 3. Takim kurallari gorev ilintili cesitliligin olumsuz etkilerini azaltip, olumlu etkilerini guclendirir mi? Bu calismada, takim uyelerinin cesitlilik algilarinin zaman icinde degisecegi ve bunun sonucunda takimici catismanin artacagi onerilmektedir. Cesitlilik ile ilgili takim kurallarinin ise cesitlilik-catisma iliskisi uzerinde degistirici etkileri olacagi savunulmaktadir. 57 takimdan 186 kisinin katildigi boylamsal anket calismasi sonucunda, one surulen hipotezlerin aksine, gorev-ilintili cesitlilik algilarinin zaman icinde azaldigi saptanmistir. Sonuclar, ayrica, cesitlilik-catisma iliskisinin takimlarin omurlerinin ortasina kadar guclendigini ama ondan sonra azaldigini ve takim kurallarinin cesitlilik-catisma iliskisini degistirdigini gostermektedir.
This Economic Letter shows that, in contrast to banks, larger credit unions, on average, have decidedly lower average costs and higher net incomes, as we might expect in the presence of important economies of scale. It further notes that these economies of scale put pressure on the credit union industry to continue consolidating into fewer, larger credit unions. It also describes how some recent legislation may have further added to the pressures on both the banking and credit union industries to consolidate.
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