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An Inquiry Into the Relationship Between Banks and Capital Markets

Jendi, Nicolas LU (2025) NEKN01 20251
Department of Economics
Abstract
This thesis examines the interaction between capital markets, commercial banks, and investment banks, by further developing an existing model of financial system architecture. The development consists of adding the distinction between commercial and investment banks to the bank sector. Previous literature has debated whether the development of the bank sector and capital markets is mutually beneficial, or whether banks and capital markets compete. Distinguishing between investment and commercial banks captures differences in the way they interact with and are affected by growing capital markets, and yields an analysis in which investment banks experience relatively greater benefits from the development of capital markets than commercial... (More)
This thesis examines the interaction between capital markets, commercial banks, and investment banks, by further developing an existing model of financial system architecture. The development consists of adding the distinction between commercial and investment banks to the bank sector. Previous literature has debated whether the development of the bank sector and capital markets is mutually beneficial, or whether banks and capital markets compete. Distinguishing between investment and commercial banks captures differences in the way they interact with and are affected by growing capital markets, and yields an analysis in which investment banks experience relatively greater benefits from the development of capital markets than commercial banks. This result bridges the gap between arguments for banks and capital markets competing, and arguments for the two exhibiting co-development. (Less)
Please use this url to cite or link to this publication:
author
Jendi, Nicolas LU
supervisor
organization
course
NEKN01 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Financial System Architecture, Capital Markets, Investment Banking, Bank Regulation, Glass Steagall
language
English
id
9195135
date added to LUP
2025-09-12 09:59:29
date last changed
2025-09-12 09:59:29
@misc{9195135,
  abstract     = {{This thesis examines the interaction between capital markets, commercial banks, and investment banks, by further developing an existing model of financial system architecture. The development consists of adding the distinction between commercial and investment banks to the bank sector. Previous literature has debated whether the development of the bank sector and capital markets is mutually beneficial, or whether banks and capital markets compete. Distinguishing between investment and commercial banks captures differences in the way they interact with and are affected by growing capital markets, and yields an analysis in which investment banks experience relatively greater benefits from the development of capital markets than commercial banks. This result bridges the gap between arguments for banks and capital markets competing, and arguments for the two exhibiting co-development.}},
  author       = {{Jendi, Nicolas}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{An Inquiry Into the Relationship Between Banks and Capital Markets}},
  year         = {{2025}},
}