The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
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Economic Education improves public knowledge about the Federal Reserve System, monetary policy implementation, and promoting financial stability through the Museum and programs for K-16 students and educators, and the community.
The authors present an analytical framework for bank complexity through the hypothesis that complexity is necessary for banks to stay viable in the evolving industry of financial intermediation. They look at organizational structures of bank holding companies gauged by the number and types of subsidiaries. Using comprehensive data on U.S. financial acquisitions over the past thirty years, the authors track consolidation and diversification that led to a significant expansion in bank complexity. They find that banks (and even nonbank financial firms) have gradually expanded into nontraditional banking through acquisitions of already‐formed subsidiaries. They also find that bank holding companies expanded by adding banks to their firm in the early 1990s. Their results are consistent with this move toward a model of finance oriented toward securitization.