Universal banking powers are permissions for a nation’s banks to provide financial services beyond “plain vanilla” banking activities. Some nations restrict banking activities to only services such as loans and deposits, while others permit commercial banks to also engage in investment banking, insurance underwriting, and/or real estate investment activities. Despite the research and policy importance of this issue, the literature essentially neglects how these powers affect the primary role of banks in creating liquidity for society. We formulate two competing hypotheses as to whether more universal banking powers increase versus decrease domestic bank liquidity creation based on theories of risk absorption, relationship banking, and scope economies/diseconomies. We test which hypothesis empirically dominates using data from 85 nations over 15 years. The data strongly support the hypothesis that universal powers boost domestic bank liquidity creation. These findings are robust to addressing endogeneity, controlling for bank regulations, macroeconomic conditions, and institutional variables, and conducting subsample analyses. We also test for international arbitrage – whether the foreign subsidiaries of banks from more restrictive countries create more liquidity in host countries with fewer restrictions – and find support for this arbitrage. Collectively, these results provide important research and policy implications.

全能银行权力是允许一个国家的银行提供“普通”银行活动之外的金融服务。一些国家将银行活动仅限于贷款和存款等服务，而另一些国家则允许商业银行也从事投资银行、保险承保和/或房地产投资活动。尽管这个问题在研究和政策上都很重要，但文献基本上忽略了这些权力如何影响银行在为社会创造流动性方面的主要作用。基于风险吸收、关系银行和范围经济/不经济理论，我们提出了两个相互竞争的假设，即更多的全能银行权力是否会增加还是会减少国内银行流动性创造。我们使用 15 年来来自 85 个国家的数据来检验哪种假设在实证上占主导地位。这些数据有力地支持了普遍权力促进国内银行流动性创造的假设。这些发现对于解决内生性、控制银行监管、宏观经济条件和制度变量以及进行子样本分析是有力的。我们还测试国际套利——来自限制较多的国家的银行的外国子公司是否在限制较少的东道国创造更多的流动性——并找到对这种套利的支持。总的来说，这些结果提供了重要的研究和政策意义。