Banks are in the course of redefining their product mix. Concentration allows banks to serve bigger accounts; internationalization opens up possibilities in currency trading and export finance; securitization calls for underwriting, brokerage, and the provision of mutual funds (asset management); and the removal of barriers between bank and insurance invites the development of bancassurance or Allfinanz. The availability of new options does not imply that all banks will pursue them all; it is not clear whether the trend is toward a broader or narrower product mix. Nor is it clear yet what universalism and specialization refer to in today's banking practice.

I survey the initial rush to diversify that greeted deregulation and then the more recent, gradual, and uneven movement toward a new form of specialization. I point to the logic that, I believe, is causing this realignment. I identify an emerging dichotomy between the two historical prototypes — Britain and Germany. I also examine two developments — bancassurance and banking via the internet — and their potential impact on the product mix.