Advantages and disadvantages of mixed operation in financial industry

The mixed operation of financial industry refers to the mutual penetration and intersection of the businesses of banks, securities companies, insurance companies and other institutions, and is not limited to their separate operations. With the rise of global financial integration and liberalization, mixed operation has become the dominant trend in the development of international financial industry.

Advantages:

1. Universal banks are engaged in both commercial banking and securities business, which can promote and support each other and complement each other.

2. Mixed operation is conducive to reducing the risks of banks themselves.

3. Mixed operation enables universal banks to fully grasp the operating conditions of enterprises and reduce the risks of loans and securities underwriting.

4, the implementation of mixed operation, any bank can run commercial banks and securities companies, thus strengthening the competition in the banking industry, is conducive to the survival of the fittest, improve efficiency, and promote the rise of the total social utility.

Disadvantages:

1, easy to form a monopoly in the financial market, resulting in unfair competition.

2. Too large a comprehensive banking group will cause problems of intra-group competition and internal coordination; It may lead to new and greater financial risks.