Universal banking under bilateral information asymmetry.

摘要: The Gramm–Leach–Bliley (GLB) Act of 1999 repealed many provisions the Glass–Steagall that curtailed competition between banks and commercial firms. Significantly, however, GLB did not repeal constraint on from owning equity in firms (“universal banking”). Should be allowed to hold corporate borrowers? If allowed, would optimally choose do so? Despite its relevance a policy perspective, there are surprisingly few theoretical analyses this issue “universal banking”. We develop model which bank's advisory role as an “inside” shareholder hinges stake. optimal capital structure entrepreneur's stakes endogenously determined world with potential double-sided moral hazard. In certain scenarios, bank may prefer any equity. Our analysis indicates allowing participation foster improved performance. This benefit universal banking should considered debates.