Beruflich Dokumente
Kultur Dokumente
CHAPTER TWO
An Overview of Banks and the
Financial Services Sector
(financial intermediaries)
Õ Paying for goods and services
2) Services it offers
Õ Checking accounts, savings plans and loans
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The Different Kinds of Banks Today
ë Commercial Banks:
Banks: Sell deposits and make
loans to businesses and individuals
ë Savings Banks:
Banks: Attract savings deposits and
make loans to individuals and families
ë Cooperative Banks:
Banks: Help farmers
farmers,, ranchers,
and consumers acquire goods and services
ë Mortgage Banks:
Banks: Provide mortgage loans on
new homes and housing projects
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The Different Kinds of Banks Today
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The Different Kinds of Banks Today
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The Different Kinds of Banks Today
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The Different Kinds of Banks Today
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Merchant Banking
In Bangladesh MBs have been provided licenses, not for
undertaking full range of investment banking activities,
rather only for providing services namely, new issue
management, underwriting and personal portfolio services
to general investors.
investors.
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Leasing
Leasing means equipment financing.
financing. It is a contract between
two parties, lessor and lessee, that conveys the right of
possession and use of specific asset to the lessee for specific
span of time and in return lessee pays predetermined rentals
to the lessor.
lessor.
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Retail Vs.
Vs. Wholesale/Corporate/Institutional Banking
ARetail banking is small denomination/volume banking
Awhile wholesale banking is large denomination banking
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Universal Bank
oThese are banks, which provide both banking as well as non
non--
banking financial services
oGerman banking is the forerunner of this concept
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International Banking
The term international banking has been used to refer to the
cross--border and cross-
cross cross-currency aspects of banking business.
business.
|ultinational banking
The term, multinational banking, has been referred to the location
and ownership of banking facilities in a large number of countries
and geographic regions.
regions.
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The Financial Service Competitors of Banks
Other Financial Intermediaries
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The Financial Service Competitors of Banks
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The Financial Service Competitors of Banks
ë Exchange of Currency:
Currency: One of the first
service offered by banks
ë Commercial Notes and Loans:
Loans: Discounting
of debts (accounts receivable)>Also
provided by finance and insurance
companies
ë Offering Savings Deposits:
Deposits: Raising
funds>Greece
funds> Greece bankers and ship owners
ë Safekeeping of Valuables: ƏGoldsmithsƐ
and their certificates
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Traditional Services Offered By Banks
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Recent Services of Banks and FIs
ë Consumer Loans:
ë Financial Advice:
Advice: Use of credit and investment of funds
ë Cash |anagement:
|anagement: Collects cash, make payments and
invest the surplus in short term interest bearing assets.
ë Equipment Leasing:
Leasing: Rent to the customer
ë Venture Capital Loans:
Loans: Finance the start up cost of high
tech new ventures
ë Selling Insurance Products:
Products: US case>Bank vs Ins. Co.
ë Security Underwriting and Brokerage Services:
Services: Banks as
³financial department stores´: US Case
Glass--Steagall Act 1933>>Gramm-
Glass 1933>>Gramm-Leach
Leach--Bliley Act1999
ë |utual Funds and Annuities:
Annuities:
ë |erchant Banking Services: Temporary purchase of
corporate stock> to aid launching of new business
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Trends Affecting Banks and Other Financial
Service Firms Today
ë Service Proliferation:
Proliferation: Non-
Non-interest service fees vs.
interest earned on loans
ë Rising Competition: Deregulation
ë Government Deregulation:
Deregulation: Broadening the service field
ë Increased Interest Rate Sensitivity:
Sensitivity: of customers
ë Technological Change:
Change: AT|, cell phone, POS
ë Consolidation and Geographic Expansion
ë E-Banking and E- E-Commerce: Operating costs
ë Convergence:: crossing industry line to broaden
Convergence
service base
ë Globalization::
Globalization
ë Increased Risk of Poor Performance and Failure
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World·s Largest Banks
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Pertinent Websites
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HISRORY OF BANKS AND ORHER FINANCIAL-
FINANCIAL-SERVICE FIRMS
(Page 7: Insights and Issues)
Review Questions:
ë ëhat are the services offered by banks 2000 years ago?