week2 - Bank BankManagement Lecture2 BankingRegulations...

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ank Management Bank Management Lecture 2 Banking Regulations onetary Policy Monetary Policy Ref: FIM Chapter 1, 2, 1A, 1B, 2A, 2B 1/13/2012 NUS Business School, Nan Li 1
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oad Map Road Map ature of banking and gulations Nature of banking and regulations Financial Statement Analysis Monetary Policy 1/13/2012 NUS Business School, Nan Li 2
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ith FIs With FIs h l d t i FI (Brokers) Households Corporations I Cash Equity & Debt FI (Asset Transformers) Deposits/Insurance Policies Cash
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ature of Banking Nature of Banking ommercial banking Commercial banking Taking deposits, making loans holesale tail Wholesale vs retail Money center banks Investment banking Raising debt and equity for companies; advice on mergers and acquisitions, restructurings, etc 1/13/2012 NUS Business School, Nan Li 4
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anking Business Model Banking Business Model ift om “originate to hold” to “originate to Shift from originate to hold to originate to distribute” Affects incentives to monitor and control risk. Shift to off balance sheet risks Degraded quality and increased risk
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h Oii t i t ib t Mdl The Originate to Distribute Model Very popular until the credit crunch of 2007 anks originated loans and then packaged Banks originated loans and then packaged them into products that were sold to investors esto s This frees up funds to make more loans hat is the implicit problem of OTD What is the implicit problem of OTD model?
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Financial Intermediation 1/13/2012 NUS Business School, Nan Li 7
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ructure of Banking in the US Structure of Banking in the US rge international banks (small number) Large international banks (small number) Regional banks (several hundred) Small community banks (several thousand) 1/13/2012 8 NUS Business School, Nan Li
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ructure of Banking in Singapore Structure of Banking in Singapore Type of Institution Number of Institutions Commercial Banks 121 ocal anks Local Banks 6 Foreign Banks 115 Foreign Full Banks 26 Wholesale Banks 50 Offshore Banks 39 erchant Banks 7 Merchant Banks 47 Finance Companies 3 Financial Holding Companies 1 1/13/2012 NUS Business School, Nan Li 9
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Changing Dynamics of Specialness: Trends in the United States Decline in share of depository institutions and py insurance companies. Increases in investment companies. May be attributable to net regulatory burden imposed on depository FIs. chnological changes affect delivery of financial Technological changes affect delivery of financial services and regulatory issues Rise of Financial Services Holding Company Financial Services Modernization Act Potential for regulations to be extended to hedge d 1/13/2012 NUS Business School, Nan Li 10 funds
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Changing Dynamics of Specialness: Global Trends S FIs facing increased competition from US FIs facing increased competition from foreign FIs
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This note was uploaded on 02/29/2012 for the course FINANCE FIN 3117 taught by Professor Lina during the Spring '12 term at National University of Singapore.

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week2 - Bank BankManagement Lecture2 BankingRegulations...

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