Universal Banking

AAA

DEFINITION of 'Universal Banking'

A banking system in which banks provide a wide variety of financial services, including both commercial and investment services. Universal banking is common in some European countries, including Switzerland. In the United States, however, banks are required to separate their commercial and investment banking services. Proponents of universal banking argue that it helps banks better diversify risk. Detractors think dividing up banks' operations is a less risky strategy.

INVESTOPEDIA EXPLAINS 'Universal Banking'

Universal banks may offer credit, loans, deposits, asset management, investment advisory, payment processing, securities transactions, underwriting and financial analysis. While a universal banking system allows banks to offer a multitude of services, it does not require them to do so. Banks in a universal system may still choose to specialize in a subset of banking services.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Limited Service Bank

    Any type of banking business facility that is located separately ...
  3. Bank

    A financial institution licensed as a receiver of deposits. There ...
  4. Central Bank

    The entity responsible for overseeing the monetary system for ...
  5. Private Banking

    Personalized financial and banking services that are traditionally ...
  6. Volcker Rule

    The Volcker rule separates investment banking, private equity ...
Related Articles
  1. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

  2. What Are Central Banks?
    Personal Finance

    What Are Central Banks?

  3. Top 7 Biggest Bank Failures
    Brokers

    Top 7 Biggest Bank Failures

  4. Who Backs Up The FDIC?
    Options & Futures

    Who Backs Up The FDIC?

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center