Regulating core and non-core banking activities. The unanswered question

The debate on structural reforms of the banking system, particularly devoted to break-up commercial and investments banks, finds out whether a full or partial banking split could reach the goal to make banks more safe and sound and to reduce the cost of bail-out. We compare different proposals pointing out their theoretical assumptions and expected results. Since the regulatory reaction to the crisis was a reinforcement of the prudential model along with structural solutions, we conclude that such a mixed model could fail the purpose to resolve the trade-off between safety and efficiency.