This document discusses international banking and money markets. It differentiates between international and domestic banking operations. International banks provide additional services like trade financing and foreign exchange. The document outlines different types of international banking offices like correspondent banks, representative offices, foreign branches, and offshore banking centers. It also discusses capital adequacy standards under Basel I and II, and components of the international money market like eurocurrency, eurocredits, and forward rate agreements.
17 Commercial Bank OperationsCHAPTER OBJECTIVESThe specific ob.docxaulasnilda
17 Commercial Bank Operations
CHAPTER OBJECTIVES
The specific objectives of this chapter are to:
· ▪ describe the market structure of commercial banks,
· ▪ describe the most common sources of funds for commercial banks,
· ▪ explain the most common uses of funds for commercial banks, and
· ▪ describe typical off-balance sheet activities for commercial banks.
Measured by total assets, commercial banks are the most important type of financial intermediary. Like other financial intermediaries, they perform the critical function of facilitating the flow of funds from surplus units to deficit units.
17-1 BACKGROUND ON COMMERCIAL BANKS
Up to this point, the text has focused on the role and functions of financial markets. From this point forward, the emphasis is on the role and functions of financial institutions. Recall from Chapter 1 that financial institutions commonly facilitate the flow of funds between surplus units and deficit units. Commercial banks represent a key financial intermediary because they serve all types of surplus and deficit units. They offer deposit accounts with the size and maturity characteristics desired by surplus units. They repackage the funds received from deposits to provide loans of the size and maturity desired by deficit units. They have the ability to assess the creditworthiness of deficit units that apply for loans, so they can limit their exposure to credit (default) risk on the loans they provide.
17-1a Bank Market Structure
In 1985, more than 14,000 banks were located in the United States. Since then, the market structure has changed dramatically. Banks have been consolidating for several reasons. One reason is that interstate banking regulations were changed in 1994 to allow banks more freedom to acquire other banks across state lines. Consequently, banks in a particular region are now subject to competition not only from other local banks but also from any bank that may penetrate that market. This has prompted banks to become more efficient in order to survive. They have pursued growth also as a means of capitalizing on economies of scale (lower average costs for larger scales of operations) and enhanced efficiency. Acquisitions have been a convenient way to grow quickly.
As a result of this trend, there are less than half as many banks today as there were in 1985, and consolidation is still occurring. Exhibit 17.1 shows how the number of banks has declined over time, thereby increasing concentration in the banking industry. The largest 100 banks now account for about 75 percent of all bank assets versus about 50 percent in 1985. The largest five banks now account for more than 50 percent of bank assets, versus 30 percent in 2001. JPMorgan Chase & Company is the largest bank in the United States with about $2.3 trillion in assets, while Bank of America Corporation has about $2.2 trillion in assets and Citigroup Inc. has about $1.9 trillion in assets.
Large banks have expanded over time by acquiring othe ...
savings bank account services by karnataka bankAprameya joshi
the document starts with introduction to financial services then goes with comercial banks and then speaks about the profile of karnataka bank and savings bank account services of karnataka bank
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
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Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
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Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
USDA Loans in California: A Comprehensive Overview.pptx
International banking and money market
1. 1
International Banking and
Money Market
Chapter Objective:
• Differentiate between international bank and domestic
bank operations and examine the differences of various
international banking offices.
Chapter Outline
International Banking Services
Types of International Banking Offices
Capital Adequacy Standards
International Money Market
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2. 2
International Banking Services
International Banks do everything domestic banks
do and:
Arrange trade financing.
Arrange foreign exchange.
Offer hedging services for foreign currency receivables
and payables through forward and option contracts.
Offer investment banking services (where allowed).
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3. 3
World’s 10 Largest Banks
Citigroup U.S.
Mizuho Bank/ Mizuho Corp Bank Japan
HSBC Holdings U.K.
Bank of America U.S.
JP Morgan Chase U.S.
Deutsche Bank Germany
Royal Bank of Scotland Group U.K.
Sumitomo Mitsui Banking Group Japan
HypoVereinsbank Germany
UFJ Bank Ltd. Japan
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4. 4
Types of International
Banking Offices
1. Correspondent bank
Banks located in different countries establish accounts
in other bank
Provides a means for a bank’s MNC clients to conduct
business worldwide through his local bank or its
contacts.
Provides income for large banks
Smaller foreign banks that want to do business ,say in the
U.S., will enter into a correspondent relationship with a
large U.S. bank for a fee
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5. 5
Types of International
Banking Offices
2. Representative office
A small service facility staffed by parent bank personnel
that is designed to assist MNC clients of the parent bank in
dealings with the bank’s correspondents.
No traditional credit services provided
Reps looks for foreign market opportunities and serves as a liaison
between parent and clients
Useful in newly emerging markets
Representative offices also assist with information about
local business customs, and credit evaluation of the MNC’s
local customers.
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6. 6
Types of International
Banking Offices
3. Foreign Branch
A foreign branch bank operates like a local bank, but is
legally part of the parent.
Subject to both the banking regulations of home country
and foreign country.
Reasons for establishing a foreign branch
More extensive range of services
Foreign branches are not subject to Canadian reserve requirements
or deposit insurance
Compete with host country banks at the local level
Most popular means of internationalizing bank operations
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7. 7
Types of International
Banking Offices
4. Subsidiary and Affiliate Bank
A subsidiary bank is a locally incorporated bank that is
either wholly owned or owned in major part by a foreign
parents.
An affiliate bank is one that is only partially owned, but not
controlled by its foreign parent.
Both subsidiary and affiliate banks operate under the
banking laws of the country in which they are incorporated.
They are allowed to underwrite securities.
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8. 8
Types of International
Banking Offices
5. Offshore Banking Center
A country whose banking system is organized to permit external
accounts beyond the normal scope of local economic activity.
The host country usually grants complete freedom from host-
country governmental banking regulations.
Banks operate as branches or subsidiaries of the parent bank
Primary credit services provided in currency other than host country
currency
Reasons for offshore banks
Low or no taxes, services provided for nonresident clients, few or no FX
controls, legal regime that upholds bank secrecy
The IMF recognizes the Bahamas, Bahrain, the Cayman Islands,
Hong Kong, the Netherlands Antilles, Panama, Singapore as
major offshore banking centers
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9. 9
Capital Adequacy Standards
Bank capital adequacy = equity capital and other
securities a bank holds as reserves.
How much bank capital is “enough” to ensure the
safety and soundness of the banking system?
Basle Accord 1 (1988): Rules-based approach + VAR
Basle Accord 2 (2003 - ?) - 3 pillars
-min. cap. Requirements
-supervisory review process
-market discipline
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10. 10
Basle Accord I: minimum bank capital
adequacy ratio (rules-based)
Banks involved in cross-border transactions.
Min. Cap. Adequacy = 8% [risk weighted assets]
Tier I Core capital = shareholder equity + retained earnings
Tier II Supplemental capital = internationally recognized
non-equity items
Tier II < 50% total bank capital
Asset Weights:
Government obligations = 0%; short-term interbank assets = 20%
Residential mortgages = 50%; other assets = 100%
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11. 11
Basle Accord I:
Risk-focused Cap. adequacy
1996 amendment allows banks to use modern portfolio models to
specify adequate Cap. Adequacy.
VAR(value-at-risk) = loss exceeded with a specified probability
over a specified time period.
1% chance: maximum loss over 10 days > bank’s capital
VAR = (PV)(σ)(Z.01)(D1/2
)
PV = portfolio value;
σ = standard deviation of return(daily);
Z.01 = standard normal value for 1-tail confidence interval;
D = days
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12. 12
International Money Market
Eurocurrency is a time deposit in an international bank
located in a country different than the country that issued
the currency.
Eurodollars are U.S. dollar-denominated time deposits in banks
located outside the United States.
Euroyen are yen-denominated time deposits in banks located
outside of Japan.
The foreign bank doesn’t have to be located in Europe.
Lower cost structure:
Reserve requirement - NO
Deposit insurance - NO
Rapid growth, especially in the Eurodollar market.
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13. 13
Eurocurrency Market
This is an external banking system that runs parallel to the
domestic banking system.
Most Eurocurrency transactions are interbank transactions in
the amount of $1,000,000 and up.
Banks seek deposits and make loans to other Eurobanks.
- loan interest rate is the interbank offered rate.
- interbank deposit interest rate is the interbank bid rate.
Common reference rates include
LIBOR = London Interbank Offered Rate
PIBOR = Paris Interbank Offered Rate
SIBOR = Singapore Interbank Offered Rate
New reference rate for the euro
EURIBOR = rate at which interbank time deposits of € are offered by
one prime bank to another.
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14. 14
Eurocredits
Short- to medium-term loans of Eurocurrency to
corporations, governments, nonprime banks or
international organizations.
Loans are often too large for one bank to
underwrite; a syndicate of banks share the risk of
the loan.
Adjustable rate - Rollover 3-6 mo. Example 6.1
On Eurocredits originating in London, the base rate
is LIBOR + X% based on the creditworthiness of
the borrower.
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15. 15
Forward Rate Agreements
An interbank contract that involves two parties, a buyer and a
seller.
The buyer agrees to pay the seller the increased interest cost on a
notional amount if interest rates fall below an agreed rate.
The seller agrees to pay the buyer the increased interest cost if
interest rates increase above the agreed rate.
Forward Rate Agreements can be used to:
Hedge assets that a bank currently owns against interest rate risk.
Speculate on the future course of interest rates.
)360/*(1
360/*)(*
daysSR
daysARSRamountNotional
FRApayment
+
−
=
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16. 16
Euronotes
Short-term notes underwritten by a group of
international investment banks or international
commercial banks (facility). 3-6 months
They are sold at a discount from face value and pay
back the full face value at maturity.
Interest rate usually less than syndicated Eurobank
loans. LIBOR + 1/8%, for example.
Bank receives a small fee for underwriting.
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17. 17
Eurocommercial Paper
Unsecured short-term promissory notes issued by
corporations and banks. 1-6 months.
Placed directly with the public through a dealer.
Eurocommercial paper, while typically U.S. dollar
denominated, is often of lower quality than U.S.
commercial paper—as a result yields are higher.
Eurocommercial paper 2001 = $243.1billion
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18. 18
International Debt Crisis
Some of the largest banks in the world were
endangered when loans to sovereign governments
of some less-developed countries.
At the height of the crisis, third world countries
owed $1.2 trillion.
Like a great many calamities, it is easy to see in
retrospect that:
It’s a bad idea to put too many eggs in one basket,
especially if:
You don’t know much about that basket.
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19. 19
Debt-for-Equity Swaps
As part of debt rescheduling agreements among the bank
lending syndicates and the debtor nations, creditor banks
would sell their loans for U.S. dollars at discounts from face
value to MNCs desiring to make equity investment in
subsidiaries or local firms in the LDCs.
A LDC central bank would buy the bank debt from a MNC
at a smaller discount than the MNC paid, but in local
currency.
The MNC would use the local currency to make pre-
approved new investment in the LDC that was economically
or socially beneficial to the LDC.
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21. 21
Japanese Banking Crisis
The history of the Japanese banking crisis is a result of a complex
combination of events and the structure of the Japanese financial system.
Japanese commercial banks have historically served as the financing arm
and center of a collaborative group know as keiretsu.
Keiretsu members have cross-holdings of an another’s equity and ties of
trade and credit.
The collapse of the Japanese stock market set in motion a downward
spiral for the entire Japanese economy and in particular Japanese banks.
This put in jeopardy massive amounts of bank loans to corporations.
It is unlikely that the Japanese banking crisis will be rectified anytime
soon.
The Japanese financial system does not have a legal infrastructure that
allows for restructuring of bad bank loans.
Japanese bank managers have little incentive to change because of the
Keiretsu structure.
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22. 22
The Asian Crisis
This crisis followed a period of economic expansion in the region
financed by record private capital inflows.
Bankers from the G-10 countries actively sought to finance the
growth opportunities in Asia by providing businesses with a full
range of products and services.
This led to domestic price bubbles in East Asia, particularly in
real estate.
Additionally, the close interrelationships common among
commercial firms and financial institutions in Asia resulted in
poor investment decision making.
The Asian crisis is only the latest example of banks making a
multitude of poor loans—spurred on no doubt by competition
from other banks to make loans in the “hot” region.
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