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?

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center