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. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center