Chapter 01 - CHAPTER 1 AN OVERVIEW OF BANKS AND THE FINANCIAL-SERVICES SECTOR Goal of This Chapter In this chapter you will learn about the many

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CHAPTER 1 AN OVERVIEW OF BANKS AND THE FINANCIAL-SERVICES SECTOR Goal of This Chapter : In this chapter you will learn about the many roles financial service providers play in the economy today. You will examine how and why the banking industry and the financial services marketplace as a whole is rapidly changing, becoming new and different as we move forward into the future. You will also learn about new and old services offered to the public. Key Topics in This Chapter Powerful Forces Reshaping the Industry What is a Bank? The Financial System and Competing Financial-Service Institutions Old and New Services Offered to the Public Key Trends Affecting All Financial-Service Firms Appendix: Career Opportunities in Financial Services Chapter Outline I. Introduction: Powerful Forces Reshaping the Industry II. What Is a Bank? A. Defined by the Functions It Serves and the Roles It Play: B. Banks and their Principal Competitors C. Legal Basis of a Bank D. Defined by the Government Agency That Insures Its Deposits III. The Financial System and Competing Financial-Service Institutions A. Savings Associations B. Credit Unions C. Money Market Funds D. Mutual Funds E. Hedge Funds F. Security Brokers and Dealers G. Investment Bankers H. Finance Companies I. Financial Holding Companies J. Life and Property/Casualty Insurance Companies 1
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IV. The Services Banks and Many of Their Closest Competitors Offer the Public A. Services Banks Have Offered Throughout History 1. Carrying Out Currency Exchanges 2. Discounting Commercial Notes and Making Business Loans 3. Offering Savings Deposits 4. Safekeeping of Valuables and Certification of Value 5. Supporting Government Activities with Credit 6. Offering Checking Accounts (Demand Deposits) 7. Offering Trust Services B.Services Banks and Many of Their Financial-Service Competitors Have Offered More Recently 1. Granting Consumer Loans 2. Financial Advising 3. Managing Cash 4. Offering Equipment Leasing 5. Making Venture Capital Loans 6. Selling Insurance Policies 7. Selling Retirement Plans C. Dealing in Securities: Offering Security Brokerage and Investment Banking Services 1. Offering Security Underwriting 2. Offering Mutual Funds and Annuities 3. Offering Merchant Banking Services 4. Offering Risk Management and Hedging Services V. Key Trends Affecting All Financial-Service Firms A. Service Proliferation B. Rising Competition C. Government Deregulation D. An Increasingly Interest-Sensitive Mix of Funds E. Technological Change and Automation F. Consolidation and Geographic Expansion G. Convergence H. Globalization VI. The Plan of This Book VII. Summary Concept Checks 1-1. What is a bank? How does a bank differ from most other financial-service providers? A bank should be defined by what it does; in this case, banks are generally those financial
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This note was uploaded on 08/06/2009 for the course BUSINESS 4444 taught by Professor Dr.dale during the Spring '09 term at University of Texas at Dallas, Richardson.

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Chapter 01 - CHAPTER 1 AN OVERVIEW OF BANKS AND THE FINANCIAL-SERVICES SECTOR Goal of This Chapter In this chapter you will learn about the many

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