ABSTRACT

The comparative study of banking institutions is concerned with discovering both the extent to which arrangements in different countries are similar and the material respects in which they differ from the forms of organisation adopted elsewhere. However, in addition to merely factual inquiry, an attempt must also be made to establish the reasons for these similarities and differences. It is not so remarkable that there should be similarities. All banks deal in money and in money substitutes, and the peculiar characteristics of the 'commodities' in which they do business is a sufficient reason to explain the emergence of certain common elements basic to all banking business, even when that is undertaken in what appear to be strikingly dissimilar environments. Thus, in any well-run bank, no matter where it is situated (with the partial exception of Soviet-type institutions), there must be a certain amount of emphasis on liquidity and on margins of safety in lending. The broad objectives and 'rules of the game' will be essentially similar. It is in the details of organisation and technique that one tends to find the differences of emphasis. Although the problems that face these institutions appear to be much the same, there is in fact a considerable degree of variety in the solutions offered to resolve them.