Introduction

This is a book about real life and big ideas. The real life is economic and institutional change in the U.S. commercial banking industry. Over the period 1975 to 2000, the regulatory barriers that strictly separated banking, insurance, and securities market activities eroded. Substantially all banking assets are now controlled by holding companies that own a broad range of financial services enterprises, prohibitions against interstate banking have fallen, and financial holding companies are now permitted to engage in a more diversified set of activities including securities underwriting, investment management, mutual funds, insurance, municipal finance, and corporate investment banking. In addition, banks have implemented a number of process innovations that change the nature of banking.