Norges Bank

Bicentenary project, Working Paper

Universal banking and the development of secondary corporate debt markets: Lessons from 1830s Belgium

Stefano Ugolini
Working Paper


This paper proposes a reassessment of the old-age debate on universal banking and growth by putting it on a different plan. Modern financial economics are used to provide new theoretical foundations to Gerschenkron’s (1962) hypothesis: universality is interpreted as a strategy for banks to reach the critical size needed in order to perform successful securitization of corporate debt. A relevant natural experiment in universal banking and industrialization (Belgium in the 1830s) illustrates the argument. The conclusion is that creating a new financial market also implies establishing intermediaries to supply crucial functions such as underwriting, certification, and liquidity provision.



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ISSN 1502-8190 (online)

Published 23 November 2010 10:56
Published 23 November 2010 10:56