[Banking and Management] Assess the advantages and limitations of Essay

[Banking and Management] Assess the advantages and limitations of universal banking OR all purpose financial institutions - Essay Example tional economic investments, the Chinese banking sector has undertaken the strategies of integrating investment services, advisory and underwriting service, home finance and asset management under the same umbrella of the commercial services provided the banks. The universal banking service offered by the Chinese state-owned banks has certain advantages as well as the limitations. On one hand, the aspect of universal banking enables the banks to increase their sales revenues and profitability by catering to the investment demands of the worldwide markets apart from the commercial services. The limitations of offering universal banking products and services lay due to the fluctuation of international economic conditions and the fluctuation of interest rates, exchange rate that would increase the risk exposure of the investment services. The concept of universal banking includes a wide range of financial services provided by the banks in order to cater to the regular banking as well as the investment needs of the customers. The aspect of â€Å"all purpose financial institutions† is related to offering comprehensive service to the customers that also help the banks to diversify the risk of their business. The various banking products and solutions that are offered under the system of universal banking includes savings and deposits accounts, loans and credit services, management of assets, investment service, underwriting services, financial analysis, advisory services, processing of payments, etc. However, banks may choose to offer specific products and services in a universal banking system depending on their specializations. The Chinese banks have been recently named by a magazine as the one of the world’s largest and profitable banks in the world (Linda and Julapa, 2000, p.33). However, this does not mean that the Chinese banking sector is more resilient to the complexities of international economies. Although developments in the Chinese banking sector have