Reliance on high leverage is one distinctive component of the bank business model. This study by Juliane Begenau and Erik Stafford suggests that the aggregate United States banking sector was relatively inefficient between 1960 and 2015. The falling costs of new production technologies in capital markets may further advantage capital markets over banks.

Description — Reliance on high leverage is one distinctive component of the bank business model. This study by Juliane Begenau and Erik Stafford suggests that the aggregate United States banking sector was relatively inefficient between 1960 and 2015. The falling costs of new production technologies in capital markets may further advantage capital markets over banks.

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Title — Do Banks Have an Edge?

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Date — January 29, 2018 5:00 am

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Source — http://hbswk.hbs.edu/stories-rss.aspx

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