Abstract 

The structure of the financial services industry is in flux. The financial crisis, regulatory overhaul, and advances in information technology are changing the financial landscape dramatically. Banks should not abolish relationship banking, which nurtures close contact with bank customers. A long-term orientation of relationship banking streamlines incentives and supports the long-term needs of bank customers. However, banks might be lured into transaction banking due to the presence of IT-driven economies of scale and competition/cooperation from non-banking companies (e.g., FinTech companies and clearing and settlement institutions). This may affect stability in banking with several insights for bank regulation, including capital regulation, bank insolvency frameworks, competition policy, and systemic risk prevention policies. At last, the changing media landscape affects how investors in the financial markets react to the news of extreme events.