This document discusses banks and financial services. It outlines the different types of financial institutions that can be called banks, as well as their competitors. It then describes the traditional roles of commercial banks and the services they offer, including more recent services. Finally, it lists some key trends affecting banks and other financial service firms today such as increased competition, deregulation, technological change, and globalization.

1. McGraw-Hill/Irwin
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All Rights Reserved
Chapter One
An Overview of Banks and the
Financial-Services Sector

2. 1-2
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Bank Management and Financial Services, 7/e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
The Different Kinds of Financial Service
Firms Calling Themselves Banks
• Commercial Banks
• Savings Banks
• Cooperative Banks
• Mortgage Banks
• Community Banks
• Money Center Banks
• Investment Banks
• Merchant Banks
• International Banks
• Wholesale Banks
• Retail Banks
• Limited Purpose Banks
• Bankers’ Banks
• Minority Banks
• National Banks
• State Banks
• Insured Banks
• Member Banks
• Affiliated Banks
• Virtual Banks
• Fringe Banks
• Universal Banks

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Bank Management and Financial Services, 7/e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
The Financial Service Competitors of Banks
• Savings Associations
• Savings Banks
• Credit Unions
• Money Market Funds
• Mutual Funds (Investment Companies)
• Hedge Funds
• Security Brokers and Dealers
• Investment Banks
• Finance Companies
• Financial Holding Companies
• Life and Property-Casualty Insurance Companies

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Bank Management and Financial Services, 7/e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
The Roles of Commercial Banks and
Their Closest Competitors
• Intermediation Role
• Payment Role
• Guarantor Role
• Risk Management Role
• The Investment Banking Role
• Savings/Investment Advisor Role
• Safekeeping/Certification of Value Role
• Agency Role
• Policy Role

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Bank Management and Financial Services, 7/e
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Traditional Services Offered By
Banks
• Carrying Out Currency Exchange
• Discounting Commercial Notes and Making
Business Loans
• Offering Savings Deposits
• Safekeeping of Valuables
• Supporting Government Activities with Credit
• Offering Checking Accounts
• Offering Trust Services

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Bank Management and Financial Services, 7/e
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More Recent Services Offered by
Banks
• Granting Consumer Loans
• Providing Financial Advice
• Managing Cash
• Offering Equipment Leasing
• Making Venture Capital Loans
• Selling Insurance Policies
• Selling Retirement Plans

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Bank Management and Financial Services, 7/e
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Offering Security Brokerage and
Investment Banking Services
• Underwriting Securities
• Offering Mutual Funds and Annuities
• Offering Merchant Banking Services
• Offering Risk Management and Hedging
Services

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McGraw-Hill/Irwin
Bank Management and Financial Services, 7/e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Trends Affecting Banks and Other
Financial Service Firms Today
• Service Proliferation
• Rising Competition
• Government Deregulation
• Increased Interest Rate Sensitivity
• Technological Change and Automation
• Consolidation and Geographic Expansion
• E-Banking and E-Commerce
• Convergence
• Globalization