Ch. 12 Notes (BUS G-345; Money, Banking; and Capital Markets; Self)

Ch. 12 Notes (BUS G-345; Money, Banking; and Capital Markets; Self)

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Unformatted text preview: Chapter 12 Banking Industry: Structure and Competition After this chapter you should have an understanding of the following, o The development of the US. banking system and how multiple regulatory agencies developed in light of the US. banking system’s history 0 The development of the “shadow banking $991391 _ 0 Structure of the US. Commercial Banking industry 0 Structure of the US. Thrift Industry Page 1 offiZ I /g;9§o z 939d 'sagJ13npu! sanunoes pus fiumueq__ sewedas pure (3103) uoumochog aauemsw uéodéo‘ [”1213de 891129.19 (“meme-seem) 886L 401w Bumuea 'maxsfls emasag lmepeg semen 8 LBL 401W GMT-1398 IE'JGDezl 'fiouauno em ;0 Jauondwog au; ;0 aoggo pue saueq [euoneu sausquse 8981. $0 10V HOPE! IBUOBBN 886!- 8161 89m ZEBL QLBI. LLBI- L6“. 38“ I o o - - o— o '9991 u; sasde] 161181.10 isawzs pauun am go xueg puooas p fiuuaueuoe: seozan uosxoep meruV 29; [33131.1er 3| 881813 pawn 8'43 40 HUBQ PUOOGS MI asdel m pemona s; Jaueuo _ 891918 penun 9143 ;0 HUBEI NEH 5/ I a. o L, a a M w grow M 3U "M09 W W UU M , 'DUWUUO 9! $91928 Dentin em 40 Hues Hajj?) .3 J. . (“f- f g I . ,r _ . a . ‘pmeyauo 31 eopawv wow ;0 xueg 73 GM 8911213 1391mm 9m“! fiuwwa IBIOIUUMOQ .10 A101SIH Alma sum 91111 mu :1 mom llk“ ’ / Historical Develo ment of the Bankin S stem Bank of North America chartered mm 0 Controversy over the chartering of banks is a continue issue throughout the history of the US. industry. Central Banks in the US. (had responsibility for the My and credit suEplied in the economy as a Whole) 0 The Bank of the United States, 1791-181 1 o The Second Bank of the United States, M— 151526, 0 Evolution from 1836 to the next central bank, National Bank Act of 1863 creates a ..#._____..—__-.._ new banking system of federally chartered banks >> Office of the Comptroller of the Currency 33> Dual bankin s stern L7§i0f€ 3' ”CITE-Mi 0 Federal Reserve System, l_9__1fl_3-present Page 3 of} M Film Supervisory Responsibility of Bank Regulatory Agencies 3 MCU/W/Yb/fflp WC ffmfifli I_.I-II:j:3; ff!“ 0 Federal Reserve and state banking authorities; .fl- a...“ .W -“-"""““"““" ‘ ' "‘""""“" “u“ "-------—-_~—-W......_.... . State banks that are members of the Federal Reserve System. 0 Fred also regulates bank holding companies. 8H3 o FDIC: insured state banks that are not Fed members. “GTI . : 60M; mm"! 6;; 3, “éTogclf‘ {fl Mflc é‘rafi. ”3,3? 0 State MW: state banks Without FDIC msurance. / (TIMI: :6“: 333.533; Igf [€31 ”5% Page 4 of i 2-! Financial Innovation and the Growth of the “Shaglgvrfiankin S stem” , Prrpfl flfr'fl'gn? iFCrC’rcS +0 ”Mr"; ""I " 7n5-tnl-rn-I 3‘44 JMJJI-‘r‘wr; .Crw‘i32iwi" VF Omar"; flkf'é‘n‘fi fiya‘fl'm ’2 Ma} 971.61)fo varfljcoflr’}? avrxfi'gr-Wf 339,. RM”;- " :hflrfvf‘f’cfivf ' FL ' fl' ' ' - - o fifcfrwfrr {oz-“15¢. F1nanc1almnovat10n 1s drlv If by he des1re to earn profits ._ 71%) W3” fig ,4 M53 a. mad Jug-mew 2‘ A change in the financial environment will stimulate a search by financial institutions for innovations that are likely to be profitable 0 Financial engineering ~c’vmfltm‘w affirm 2) f/hf/I'Nf-‘rir/vqhahdw/ w flWdar/j ”Hr/(1L drew?) emf-r? JW'ermg Responses to Changes in Demand Conditions: Interest Rate Volatility Adjustable-rate mortgages flew 0 Flexible interest rates keeE Erofits high when rates rise _._.. r...» 0 Lower initial interest rates make them attractive to home buyers Financial Derivatives r- 0 Ability to @gg interest rate risk ,5 W” " o W to previously issued (i.e. derived from) securities. .a F -- - - (W M5 PageSOf5M ...
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