Proponents of reform point out that regulatory restrictions prevent a firm that might be able to provide a financial service to customers at lowest cost from competing for customers' business, and that services that fill the same customer needs and pose very similar risks — like making short-term loans and underwriting commercial paper — often cannot be provided by the same firm. They also have argued that as customer demand shifts from one product to another, financial firms frequently face a dilemma: to seek out ways to evade regulations or else to lose business.

This article appeared in the July/August 1988 edition of Business Review.

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