商業(yè)銀行管理英文課件：第1-3章 An Overview of Banks and the Financial-Services Sector

1、Chapter One An Overview of Banks and the Financial-Services SectorKey TopicsWhat Is a Bank?The Financial System and Competing Financial-Service InstitutionsOld and New Services Offered to the PublicKey Trends Affecting All Financial-Service Firms1.1 What Is a Bank?WhyBank of America is called the ba

2、nk？J.P. Morgan Known as the investment bank?Merrill-Lynch Referred to as securities brokerage company?Alabama Credit Union Referred to as the credit union?State Farm Referred to as the insurance company?History (the law, structure factors) make these institutions different.in history, banks absorb t

3、he current deposit and issue commercial loans.Therefore, they are known as commercial Banks.1.1 What Is a Bank?A bank can be defined in terms of：the economic functions it serves,the services it offers its customers,the legal basis for its existence.1.1 What Is a Bank?Bank is lending institution to p

4、rovide the deposit service can be extracted according to the requirements at any time (For example, issue a cheque or electronic transfer ) and provide the business or the nature of the enterprise loans（Provide loans for private enterprises trying to expand merchandise inventory or purchase new equi

5、pment ）.The United States: must be run by FDIC and participate in the deposit insurance institution. 1.1 What Is a Bank?The Different Kinds of Financial Service Firms Calling Themselves BanksCommercial BanksSavings BanksCooperative BanksMortgage BanksCommunity BanksMoney Center BanksInvestment Banks

6、Merchant BanksIndustrial BanksInternational BanksWholesale BanksRetail BanksLimited Purpose BanksBankers BanksMinority BanksNational BanksState BanksInsured BanksMember BanksAffiliated BanksVirtual BanksFringe BanksUniversal BanksEXHIBIT 1-1 The Many Different Kinds of Financial-Service Firms Callin

7、g Themselves Banks1-8Copyright 2013 The McGraw-Hill Companies, Inc. Permission required for reproduction or display.The Financial Service Competitors of BanksSavings AssociationsCredit UnionsMoney Market FundsMutual Funds (Investment Companies)Hedge FundsSecurity Brokers and DealersInvestment BanksF

8、inance CompaniesFinancial Holding CompaniesLife and Property-Casualty Insurance Companies1.2 The Financial System and Competing Financial-Service InstitutionsBanking competition: the market share* In March 2005, more than $43 trillion* Based on the data of 2003Banking competition: The change of the

9、market shareBanks and other financial institutions deposit for comparison:（2004，Millions of units）From Koch and MacDonald, Bank Management, 6e, 2006, p.6Based on the amount of bank assetsThe main types of bankGlobal financial centreLarge and medium-sized bank of a fully functional serviceSmall and m

10、edium-sized BanksWholesale banksThe limited (special) bankNetwork bank1.3 Services Banks and Many of Their Closest Competitors Offer the PublicPayment systemFinancial intermediariesOther financial ServicesPayment systemCoin and currency; currency exchange Retail payments system Large-dollar payments

11、 system for business and government1.3 Services Banks and Many of Their Closest Competitors Offer the PublicFinancial intermediaries$5,000$50 M8%5%1.3 Services Banks and Many of Their Closest Competitors Offer the PublicOther ServicesRecent Services Offered by Banks:Granting Consumer LoansProviding

12、Financial AdviceManaging CashOffering Equipment LeasingMaking Venture Capital LoansSelling Insurance PoliciesSelling Retirement PlansOffering Security Brokerage and Investment Banking ServicesOffering Mutual Funds and AnnuitiesOffering Merchant Banking ServicesOffering Risk Management and Hedging Se

13、rvices1.3 Services Banks and Many of Their Closest Competitors Offer the Publicfunctionservice contentIntermediary functionTurn household deposits into loansPayment functionsPay for goods and service for the customer （Pay cheque, t/t）Guarantee functionOn behalf of reimbursement When the customer bec

14、omes insolvent（issue of letter of credit）Risk management functionHelp customers to deal with assets or personal economic lossesInvestment advisory functions of depositDeposit design, management and protection, help customers to achieve a long-term goal Worth keeping proveKeep valuables and prove the

15、ir actual market valueFumigation of agentInstead of customer manage the asset recovery securitiesPolicy functionActs as the government control and realize the goal of social economic growthGoalSize of cash flowTiming of cash flowRisk of cash flowCreditInterestrateOperationalLiquidityPriceConstraints

16、MarketcompetitionSocialLegal andregulatoryWhy do banks perform those services?Maximizeshareholderwealth1.4 Key Trends Affecting All Financial-Service FirmsService ProliferationRising CompetitionGovernment DeregulationAn Increasingly Interest-Sensitive Mix of FundsTechnological Change and AutomationC

17、onsolidation and Geographic ExpansionConvergenceGlobalizationQuestion?Chapter Two The Impact of Government Policy and Regulation on Banking and the Financial-Services IndustrySlides based on Bank Management & Financial Services by Peter Rose and Sylvia Hudgins, 8th edKey TopicsThe Principal Reasons

18、for Bank and Nonbank Financial-Services Regulation Major Bank and Nonbank Regulators and LawsEmergency Economic Stabilization Act and the Global Credit CrisisThe Central Banking System Organization and Structure of the Federal Reserve System and Leading Central Banks of Europe and Asia Financial-Ser

19、vices Industry Impact of Central Bank Policy Tools2.1 Banking Regulationone of the most government regulated of all industriescommercial banking.FDIC forever demanding increased capitalAdd more capital Provide more reports More public servicesFederal Reserve System Supervises and regularly examines

20、all state-chartered member banks and bank holding companies operating in the United States and acts as the “umbrella supervisor” for financial holding companies(FHCs) that are now allowed to combine banking, insurance, and securities firms under common ownership. Imposes reserve requirements on depo

21、sits (Regulation D). Must approve all applications of member banks to merge, establish branches, or exercise trust powers. Charters and supervises international banking corporations operating in the United States and U.S. bank activities overseas.Bankings Principal Regulatory Agencies and Their Resp

22、onsibilitiesComptroller of the Currency Issues charters for new national banks. Supervises and regularly examines all national banks. Must approve all national bank applications for branch offices, trust powers, and acquisitions.Federal Deposit Insurance Corporation Insures deposits of federally sup

23、ervised depository institutions conforming to its regulations. Must approve all applications of insured depositories to establish branches, merge, or exercise trust powers. Requires all insured depository institutions to submit reports on their financial condition.Department of Justice Must review a

24、nd approve proposed mergers and holding company acquisitions for their effects on competition and file suit if competition would be significantly damaged by these proposed organizational changes.Securities and Exchange Commission Must approve public offerings of debt and equity securities by banking

25、 and thrift companies and oversee the activities of bank securities affiliates.State Boards or Commissions Issue charters for new depository institutions. Supervise and regularly examine all state-chartered banks and thrifts.Why are banks so closely regulated1. First, banks are among the leading rep

26、ositories of the publics savings, especially the savings of individuals and families.2. Banks are especially closely watched because of their power to create money in the form of readily spendable deposits by making loans and investments.3. Banks and their closest competitors are also regulated beca

27、use they provide individuals and businesses with loans that support consumption and investment spending.4. Finally, banks, in particular, have a long history of involvement with federal, state, and local government.2.2 Major Banking LawsNational Banking Act (1863,1864)Federal Reserve Act of 1913The

28、Banking Act of 1933 (Glass- Steagall)FDIC Act 1935Social Responsibility ActsDepository Institution Deregulation and Monetary Control Act (DIDMCA) 1980Garn-St. Germain Act 1982Competitive Equality in Banking Act (CEBA) 1987Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) 1989FDIC

29、Improvement Act 1991Riegle-Neal Act 1994Gramm-Leach-Bliley Act 1999The USA Patriot Act 2001The SarbanesOxley Accounting Standards Act 20022.3 The 21st Century Ushers In an Array of New Laws, Regulations, and Regulatory StrategiesFair and Accurate Credit Transactions (FACT) Act 2003Check 21 2004New B

30、ankruptcy Rules 2005Federal Deposit Insurance Reform Act 2005Emergency Economic Stabilization Act of 20082.4 The Regulation of Nonbank Financial-Service Firms Competing with BanksCredit Unions National Credit Union AdministrationSavings Associations Office of Thrift SupervisionMoney Market Funds Sec

31、urities and Exchange CommissionInsurance CompaniesState Insurance CommissionsFinance Companies State GovernmentsMutual FundsSecurities and Exchange CommissionSecurities Brokers and DealersSecurities and Exchange CommissionHedge FundsFace almost no regulations A central banks primary job is monetary

32、policyMonetary Policy Tools ：Open Market Operations (OMO)Discount RateReserve Requirementsobjective： Control of the money and credit conditions2.5 The Central Banking System: Its Impact on the Decisions and Policies of Financial InstitutionsQuestion?Chapter Three The Organization and Structure of Ba

33、nking and the Financial-Services IndustrySlides based on Bank Management & Financial Services by Peter Rose and Sylvia Hudgins, 8th edKey TopicsThe Organization and Structure of the Commercial Banking IndustryInternal Organization of the Banking Firm: Community and Money-Center BanksThe Array of Org

34、anizational Structures in Banking: Unit, Branch, Holding Company and Electronic-ServiceNumber of American Banks： 1930s - 1980s, number of American commercial banks steadily wander between 13000 to 15000. Starting in the 80s, a steady decline in the number of commercial Banks. In 2007, there are abou

35、t 7350 commercial Banks in America. Size of American Banks： Most commercial banks in the United States are small by global standards. Almost half of all U.S. insured banking organizationsapproximately 3,200 commercial banksheld total assets of less than $100 million each in 2007.However, these small

36、est financial institutions, numerous as they are, held only about 2 percent of total industry assets.3.1 The Organization and Structure of the Commercial Banking IndustryAssets Held by U.S. FDIC-insured Commercial Banks(Total Industry Assets of $10,411 Billion in 2007)Number of U.S. FDIC-insured Ban

37、ks(Total of 7,350 Banks Operating in 2007)Think about:：how many Banks in our country? Analysis the scale, quantity and organization form?Conclusion： The U.S. commercial banking trends: Advancing Size and Concentration of Assets. The 10 largest American banks now control close to half of all industry

38、 assets, while the 100 largest U.S.banking organizations hold more than three-quarters of industrywide assets and their market share has risen recentlyCommunity Banks and Other Community-Oriented Financial FirmsTypical Size is $300 Million.The organization structure is not complicated.Significantly

39、impacted by changes in the health of the local economy.Limited Opportunities for AdvancementUsually know their customers well and are good at monitoring the ever-changing fortunes of households and small businesses.3.2 Internal Organization of the Banking FirmThis bank is heavily committed to attrac

40、ting smaller household deposits and to making household and small business loans.Organization Chart for a Smaller Community BankLarger BanksMoney Center, Wholesale and RetailGenerally Multi-Billion Dollar CompanyOrganizational Chart is Much More ComplexServe Many Different Markets with Many Differen

41、t Services, they are better diversifiedBetter Able to Withstand Risks of Fluctuating EconomyAble to Raise Large Amounts of Capital at Relatively Low CostsOrganization Chart for a Money Center or Wholesale Bank Serving Domestic and International Markets3.3 The Array of Organizational Structures and T

42、ypes in the Banking IndustryCommon Classifications of U.S. BanksSource: FRB and FDIC, 2005Deposits Held By BanksSource: FRB and FDIC, 2005classify modern depository institutions by their corporate or organizational structure:Their assets may be under the control of a single corporation or they may b

43、e structured as multiple corporations linked to each other through a common group of stockholders.They may sell all of their services through a single office or offer those services through multiple facilities scattered all over the region and around the globe.They may reach the public exclusively o

44、nline, using computers and the telephone, or set up scores of neighborhood branch offices3.3.1 Unit Banking OrganizationsOffer All Services From One OfficeOne of the Oldest Kinds of BanksNew Banks are Generally Unit Banks Until Can Grow and Attract More Resources 3.3.2 Branch Banking OrganizationsOf

45、fer Full Range of Services from Several LocationsSenior Management at the Home OfficeEach Branch has its Own Management Team with Limited Decision Making AbilitySome Functions are Highly Centralized, While Others are DecentralizedReasons for Growth of BranchingExodus of Population to Suburban Commun

46、itiesIncreased Bank Failures in Recent YearsBusiness Growth3.3.3 Web Sites and Electronic Networks ： Electronic BranchesInternet Banking ServicesAutomated Teller Machines (ATMs)Point of Sale (POS) Terminals3.3.4 Web Sites and Electronic Networks ： Virtual BanksProvides their services Exclusively Thr

47、ough the WebCan Generate Cost Savings Over Traditional Brick and Mortar BanksHave Not Yet Demonstrated They Can Be Consistently Profitable3.3.5 Bank Holding Companies (BHC)A Corporation Chartered for the Purpose of Holding the Stock of One or More BanksControl of a bank is Assumed When 25% or More o

48、f the Stock is OwnedMust Get Approval from Federal Reserve Board to Control a BankCitigroupCiticorp花旗公司Citi Holdings花旗持股3.3.5 Bank Holding Companies (BHC)China International Trust & Investment Corporation Group One-Bank Holding Companies Controlled stock in just one bank, but frequently owned and op

49、erated one or more nonbank businesses as well.Multibank Holding Companies Multibank companies number just under 900 but control close to 70 percent of the total assets of all U.S. banking organizations. Banks acquired by holding companies are referred to as affiliated banks. Banks that are not owned

50、 by holding companies are known as independent banks.One-Bank Holding Companies vs. Multibank Holding CompaniesNonbank Businesses of BHCsFinance CompaniesMortgage CompaniesData Processing CompaniesFactoring CompaniesSecurity Brokerage FirmsFinancial AdvisingCredit Insurance UnderwritersMerchant Bank

51、ingInvestment Banking FirmsTrust CompaniesCredit Card CompaniesLeasing CompaniesInsurance Companies and AgenciesReal Estate ServicesSavings AssociationsReasons for the Growth of BHCs Geographic DiversificationProduct Line DiversificationTax ShelteringDouble LeveragingSource of StrengthA Way Around R

52、egulatory RestrictionsReasons for Full-Service Interstate BankingNeed to Bring New Capital to Revive Struggling Local EconomiesThe Expansion by Non Bank Financial Institutions with Fewer Restrictions A Strong Desire by Large Banks to Expand GeographicallyBelief Among Regulators that Large Banks are

53、More Efficient and Less Prone to FailureAdvances in Technology3.4 Interstate Banking and the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994Allows BHCs to Acquire Banks Anywhere in the U.S.Allows BHCs to Convert B

54、anks to Branches June 1997States Can Opt Out and Not Allow BHCs to Convert to BranchesStates Can Opt In EarlyLimits Deposits of One BHC to 10% Nationwide and 30% Within One StateProponents and Opponents of Interstate BankingProponentsEfficient Use of Scarce ResourcesLower Prices for ServicesGeograph

55、ic DiversificationEfficient Flow of Credit in the SystemOpponentsIncreased Bank ConcentrationLess CompetitionHigher Prices for ServicesDrain Resources from CommunityFinancial Holding Companies Special Type of Holding CompanyOffers the Broadest Range of ServicesList of Activities Offered May Expand as Regulators Decide What Services are Compatible with BankingEach Affiliated Financial Firm has its Own Capital and Management and its Own Profit or Loss3.5 An Alternative Types of