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2.  See Randall S. Kroszner, "The Evolution of Universal

Banking and Its Regulation in Twentieth-Century America," in

Universal Banking: Financial System Design Reconsidered, ed.

Anthony Saunders and Ingo Walter (New York: Irwin Profes-

sional Publishers, 1996), pp. 70-99.

3.  See Randall S. Kroszner and Raghuram G. Rajan, "Is the

Glass-Steagall Act Justified? A Study of the U.S. Experience

with Universal Banking before 1933," American Economic Re-

view 84 (September 1994): 810-32; and Randall S. Kroszner

and Raghuram G. Rajan, "Organization Structure and Credibil-

ity: Evidence from Bank Securities Activities before the

Glass-Steagall Act," Journal of Monetary Economics 39 (Au-

gust 1997): 475-516.

4.  See, for instance, Alan Greenspan, "Statement of Alan

Greenspan, Chairman, Board of Governors of the Federal Re-

serve System, before the Senate Committee on Banking, Hous-

ing, and Urban Affairs," Federal Reserve Bulletin, December

1987.

5.  Kroszner and Rajan, "Is the Glass-Steagall Act Justi-

fied?" and Kroszner and Rajan, "Organization Structure and

Credibility," compare the performance of securities under-

written by commercial banks and their affiliates with that

of securities underwritten by investment banks before Glass-

Steagall.

6.  See, for instance, Greenspan, "Statement before the Sen-

ate Committee on Banking, Housing, and Urban Affairs."

7.  See, for instance, Alan Greenspan, "Statement of Alan

Greenspan, Chairman, Board of Governors of the Federal Re-

serve System, before the Subcommittee on Finance and Hazard-

ous Materials of the Committee on Commerce, U.S. House of

Representatives," July 17, 1997.

8.  See Kroszner and Rajan, "Organization Structure and

Credibility."

9.  This section draws on George Kaufman and Randall Krosz-

ner, "How Should Financial Institutions and Markets Be Stru-

ctured?" in Safe and Sound Financial Systems: What Works for

Latin America? ed. Liliana Rojas-Suarez (Washington: Inter-

American Development Bank, 1997), pp. 97-122; and Kroszner,

"Rethinking Bank Regulation."

10. See Douglas Diamond and Philip Dybvig, "Bank Runs, De-

posit Insurance, and Liquidity," Journal of Political Econo-

my 91 (June 1983): 401-19.