CH13 - SC

CH13 - SC - TYPES OF REGULATION SAFETY &...

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Unformatted text preview: TYPES OF REGULATION SAFETY & SOUNDNESS MONETARY POLICY CREDIT ALLOCATION CONSUMER & INVESTOR PROTECTION ENTRY & CHARTERING SAFETY & SOUNDNESS TO PROTECT DEPOSITORS AGAINST RISK OF BANK FAILURE LOAN TO SINGLE BORROWER 15% OF CAPITAL (DIVERSIFIED PORTFOLIO; OCC) MINIMUM CAPITAL REQUIREMENTS (COVER LOAN LOSSES) DEPOSIT INSURANCE (PREVENT BANK RUNS) MONETARY POLICY BANK DEPOSITS PLAY A SIGNIFICANT ROLE IN THE TRANSMISSION OF MONETARY POLICY REQUIRED RESERVES CREDIT ALLOCATION KEY SECTORS (HOUSING, FARMING, ..) ARE SUBSIDIZED BY THE GOVT USURY LAWS FANNIE MAE, FREDDIE MAC CONSUMER & INVESTOR TO ENHANCE EQUAL ACCESS TO LENDING MARKETS REDUCE ABUSES BY COMMERCIAL & INVESTMENT BANKS ENTRY & CHARTERING ENTRY-AND-EXIT REGULATIONS REGULATORS FDIC OCC FRS STATE BANK REGULATORS REGULATORY STRUCTURE PRODUCT & GEOGRAPHIC EXPANSION DEPOSIT INSURANCE BALANCE SHEET OFF-BALANCE-SHEET PRODUCT RESTRICTIONS GLASS-STEAGALL ACT (1933) SEPARATION BETWEEN COMMERCIAL BANKING (DEPOSITS & LOANS) AND INVESTMENT BANKING (UNDERWRITING, ISSUING, DISTRIBUTING SECURITIES) FINANCIAL SERVICES MODERNIZATION ACT (1999) BANKING & COMMERCE NONBANK BANKS FSHC CANT INVEST IN CORPORATIONS FOR A INDEFINITE PERIOD OF TIME CANT ACTIVELY MANAGE CORPORATIONS GEOGRAPHIC EXPANSION INTRASTATE BANKING RESTRICTIONS INTERSTATE BANKING RESTRICTIONS DEFACTO BRANCHING MBH DEPOSIT INSURANCE FDIC (FEDERAL DEPOSIT INSURANCE CORP) WAS ESTABLISHED BY THE BANKING ACT OF 1933 TO AVOID BANKING PANICS (BANK RUNS) REDUCE BANK FAILURES THE ESTABLISHMENT OF REDUCED THE NUMBER OF BANK FAILURES (AT LEAST FOR 50 YRS) SHIFTED RISK FROM DEPOSITORS TO FDIC FDIC COVERAGE (PER 1933 $2,500 (TO PROTECT SMALL DEPOSITORS WHO ARE UNABLE TO ASSESS RISK OF BANK) 1970s $40,000 1980 p $100,000 (SMALL DEPOSITOR???) 2008 $250,000 FDIC ANNUAL PREMIUM DEPOSITORY INSTITUTIONS (DIF) FROM 7 TO 77 BASIS POINTS PER YEAR (BASED ON RISK) FDIC ANNUAL PREMIUM...
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CH13 - SC - TYPES OF REGULATION SAFETY &...

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