THE UNIVERSAL BANK AND THE CREDIT GROUP - SOLICITATIONS FROM THE MARKET AND PRUDENTIAL REGULATION

The legislative decree incorporating into Italy the Second EC Directive on Banking permits the adoption of both the universal bank and the credit groups. Banks may, therefore, organize their business according to different and innovative models. The extent of the restructuring animating the ''petrified forest'' demands careful assessment of the strengths and weaknesses of each design: the specialized, group, or universal bank- This paper examines first the theoretical basis for the role of intermediaries ad the markets that finance production and accumulation. The effects of information asymmetries are looked at and stress thal the universal bank as a model, albeit unrefined, nevertheless is capable of promoting long-term growth of the economy. We go on to explore the problems surrounding the production functions of financial intermediaries and, specifically, the presence of economies of scale and scope. Th, different models are compared and contrasted from the Point Of view of the pursuit of strategies of diversification of product. Finally, we assess the impact on the organizational choices made of the statutory responsibility of the group parent imposed by supervisory regulations on groups; the combination of these secondary norms and of the adoption of the Second Directive would seem to push Italy towards the universal bank, thus changing radically the existing structures.