CH 11, 14, 11-20-08

CH 11, 14, 11-20-08 - 11/20/2008 Bus 171a CH11 Commercial...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
11/20/2008 Bus 171a CH11 Commercial Banks Thrifts – Depository institutions - Savings associations - Savings banks - Credit unions Finance Companies Insurance companies Securities finance + investment + banks: 2% asset as of equity Mutual Funds Pension Funds Balance Sheet of Commercial Bank - Assets a. Loans – Some kind of security - Liability a. Deposits Balance Sheet of Industrial Company - Assets a. Deposits – Some kind of security - Liability a. Loans – Deposit Commercial Banks - Critical role in conduct of monetary policy a. Fractional reserve banking system b. Federal Reserve buys and sells T-Securities from / to commercial banks (commercial banks hole some $1 trill in T-Securities) - How do they make money? a. borrow at lower rates and lend at higher rates b. Various banking securities 1. Extend credit for various business transactions (letter and credit) 2. Manage investment for clients 3. 84 business units 4. Correspondence banking (local bank sends money to national bank. Bank sends to branch in other state then the other party could get the money) - Now 7500 commercial banks in US
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
-
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

CH 11, 14, 11-20-08 - 11/20/2008 Bus 171a CH11 Commercial...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online