i01ariclal services, including investment banking) benefits ..... would thus be most natural to first ask the question whether there is a case for restrictions to begin.
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WORKING
PAPER
Alternative Frameworks for Providing Financial Services
;XI9
218 9
The behavior of actors in
financial systemsdepends crucialiy or the incentives that motivate them. The right
Stijn Claessens
regulation, supervision,and
Daniela Klingebiel
incentives- including the scope of permissibleactivities,
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WVS
degree of contestability, and extent of the safety net
-
for
financial servicescan make the sector more resilient in
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the face of adverse shocks.
The World Bank
FinancialSector Strategyand PolicyGroup September 1999
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Draw:viu on cont r experience. Claessens an-id gIelrei analvze alternative franevorks for providing
Design of sae/ty net. The design of the safety net is important in the tradeoff between ensuring th-e safety
fr-1.n-lal
and soundness
services.
Scope of permiissible activities. The integrated banking Kommercial iaŽnkingn fully integrated with other i01ariclal services, including investment banking) benefits h -r'nancial institutions and consumners. Potential costs, suci. a exLendinag the satetv net to nondeposit financial scr ices, can be miuI-atec with safeg'ards and firewalis, w7iihequi"e regulatoir enforcement and monitoring. ltre-nationaliv. coun-r.es are moving towsard the *Lfr.graLed1 T-oib. Thc vwiderscope of services appears to 105
