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  • Essay / Universal Banking Essay - 2115

    On the one hand, many favor the viability and stability of the reforms, while, on the other hand, some authors argue that the reforms would reduce diversity operations and would increase the associated risks of failure. For example, Chow and Surti (2011) highlighted the plausible viability of the ring-fencing technique in terms of contagion risk management. In the same vein, Montanaro and Tonveronachi (2011) stated that a one-size-fits-all approach may not be able to produce effective results and, therefore, the various country-specific implications may compound the challenges. However, with the arguments discussed, it is accepted that universal models with relatively low investment share are more stable in times of crisis, which is supported by numerous empirical evidence. Some of the main empirical studies supporting a high/low investment structure are discussed in