This article considers the public policy issues regarding the appropriate corporate structure of a firm that provides basic banking services along with other financial services. We refer to such firms as financial conglomerates—a category that includes universal banks, multiproduct bank holding companies, and other diversified financial firms that perform basic banking functions. We address the question of how the regulation of the basic banking business in the United States should be organized in a world economy in which American banks must compete with financial conglomerates.