Abstract
This article has the following thesis: changes in banking and the role of banks in real economy in recent years give an argument for treating banks as a public good. Banks received great support from governments as a result of the subprime crisis. G-20 and European Commission recommended new regulations for this sector after the crisis. As a consequence of banking development, more than 90% of the population use banking services in many countries. New social functions of banks have appeared. Doctrines about recovery and government support for banks were changed in parallel (e.g. LoLR). Presently, there are some arguments for recognition of public good doctrine in banking such as: a very big area for state regulation, state banking supervision, state system of deposits insurance, realization of task delegated by the state, social responsibility of banks and others. These arguments confirm that banks’ activity has a particular importance for the society and the economy, and would be public good.
Highlights
Financial services have become common; for those who do not have access to them there are programs for counteracting financial exclusion
State intervention on a great scale during the subprime crisis indicates that the governments and international institutions treat banking as a special good
Answers to the following questions seem to be important from the point of view of a banking company: what criteria should determine the public nature of financial services; what can be treated as a public good in banking; should banks assume receiving public help in the event of crisis? Presently, everyone agrees: a bank was and still is an institution of public trust
Summary
Financial services have become common; for those who do not have access to them there are programs for counteracting financial exclusion. The new considerations for banking, new risks and new dimension for potential financial crises create the question whether banking has become a public good. State intervention on a great scale during the subprime crisis indicates that the governments and international institutions treat banking as a special good. Answers to the following questions seem to be important from the point of view of a banking company: what criteria should determine the public nature of financial services; what can be treated as a public good in banking; should banks assume receiving public help in the event of crisis? Everyone agrees: a bank was and still is an institution of public trust. The goal of this article is to prove that present banks should be treated as a public good Answers to the following questions seem to be important from the point of view of a banking company: what criteria should determine the public nature of financial services; what can be treated as a public good in banking; should banks assume receiving public help in the event of crisis? Presently, everyone agrees: a bank was and still is an institution of public trust.
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