september 13 - 1. Issue rules and regulations that tell the...

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Karina Santana September 13,2011 Money and banking Bank regulatory structure 1. Dual banking structure a. Federal government b. State 2. No single federal regulator 3. Structural (vs.Functional:regulated by what you are as oppose to what you do)regulation FEDERAL STATE Charters issued by? OCC BANKING DEPT. Become automatic member of? FDIC-FED RESERVE OPTION OF: FDIC- FEDERAL RESERVE ANY BANK WITH THE WORD NATIONAL IN IT IS FEDERAL - Because these banks do not have to become part of the FDIC they decide they want to by doing the COST- BENEFIT ANALYSIS. The benefit being that they are insured and you have access to the lender of last resort, but they have to pay a premium, once you’re a member you are responsible to oblige by the rules and regulations Division of regulatory labor Federal banking regulatory OCC 2,000banks FDIC 3,700banks FED RESERVE 800banks How do these regulator “regulate”?
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Unformatted text preview: 1. Issue rules and regulations that tell the banks how to operate. a. WHY? GOAL: to ensure safety and soundness 2. EXAMINATIONS a. CAPITAL ADEQUACY: reserve b. ASSET QUALITY: loans(borrowers info) c. MANAGEMENT d. EARNING: profit wise compare to other banks of equal size- low can be a concern for failure e. LIQUILITY f. SENSITIBITY: for interest rate risk *** CAPITAL ADEQUACY, ASSET QUALITY and MANAGEMENT has to do with the safety and sound exam GOAL 1. To ensure safety and soundness 2. Promote competition 3. Consumer protection BANK HOLDING COMPANY ***Not a bank, its a corporation that owns a bank 1. Circumvent geographic restrictions 2. Branching from bank to bank ***1956 law: a bank can engage in any activity that is closely and properly related to BANKING WHAT IS BANKING? The business of providing financial services...
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This note was uploaded on 10/12/2011 for the course BUSN 3320 taught by Professor Friedman during the Fall '11 term at CUNY Brooklyn.

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september 13 - 1. Issue rules and regulations that tell the...

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