Universal bank

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A universal bank participates in many kinds of banking activities and is both a Commercial bank and an Investment bank.^[1]

The concept is most relevant in the United Kingdom and the United States, where historically there was a distinction drawn between pure investment banks and commercial banks. In the US, this was a result of the Glass-Steagall Act of 1933. In both countries, however, the regulatory barrier to the combination of investment banks and commercial banks has largely been removed, and a number of universal banks have emerged in both jurisdictions. However, at least up until the global financial crisis of 2008, there remained a number of large, pure investment banks.

In other countries, the concept is less relevant as there is not regulatory distinction between investment banks and commercial banks. Thus, banks of a very large size tend to operate as universal banks, while smaller firms specialised as commercial banks or as investment banks. This is especially true of countries with a European Continental banking tradition. Notable examples of such universal banks include Deutsche Bank of Germany, and UBS and Credit Suisse of Switzerland.