NBFIs Part 1(1).pptx - Chapter 3 Non-bank Financial Institutions(NBFIs Chapter Organisation 3.1 3.2 3.3 3.4 3.5 3.6 Introduction Investment and Merchant

NBFIs Part 1(1).pptx - Chapter 3 Non-bank Financial...

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Chapter 3 Non-bank Financial Institutions (NBFIs)
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Chapter Organisation 3.1 Introduction 3.2 Investment and Merchant Banks 3.3 Life Insurance Offices 3.4 General Insurance Offices 3.5 Superannuation Funds 3.6 Finance Companies and General Financiers
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3.1 Introduction NBFIs can be differentiated by their source and use of funds, OBS business and regulation
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3.2 Investment and Merchant Banks Evolved under regulation Officially classified as ‘money market corporations’ (not authorised banks) Size of balance sheet not constrained by capital adequacy requirements Primarily deal in wholesale finance
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3.2 Investment and Merchant Banks (cont.) Sources of funds Mainly offshore money market securities Uses of funds Primarily short-term loans to corporations and government Little direct involvement in household sector except through cash management and unit trust products
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3.2 Investment and Merchant Banks (cont.) Other activities Deregulation has allowed banks to move into merchant bank activities This led money market corporations to develop their OBS business Provide advice, management services and funding arrangements for Mergers and acquisitions » Takeover company seeks to gain control over a target company
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3.2 Investment and Merchant Banks (cont.)
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  • Fall '16
  • faheem
  • Finance, merchant banks

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