卧的贸易孝 1951 Chapter 1 Fundamental Forces of Change in Banking
Chapter 1 Chapter 1 Fundamental Forces of Fundamental Forces of Change in Banking Change in Banking
What were banks in the past? Historically,commercial banks have been the most heavily regulated companies. ■ Resulted in a banking system with a large number of smaller banks that was limited in the scope of products and services that could be offered and the geographic areas where individual banks could compete. As a result,they were the safest and most conservative business. Although regulations limited opportunities and risks,they virtually guaranteed a profit. 麓行贺影≠号
What were banks in the past? What were banks in the past? Historically, commercial banks have been the most heavily regulated companies. Resulted in a banking system with a large number of smaller banks that was limited in the scope of products and services that could be offered and the geographic areas where individual banks could compete. As a result, they were the safest and most conservative business. Although regulations limited opportunities and risks, they virtually guaranteed a profit
Two areas of changes Traditional role of banks as financial intermediaries declined New products such as cash management accounts, mutual funds,commercial paper,and junk bonds have become more prevalent. Banks have responded by accepting lower spreads, taking on more risk,and expanding their customer and product base. Evolution of banking into nontraditional roles 猫的资6+孝
Two areas of changes Two areas of changes Traditional role of banks as financial intermediaries declined New products such as cash management accounts, mutual funds, commercial paper, and junk bonds have become more prevalent. Banks have responded by accepting lower spreads, taking on more risk, and expanding their customer and product base. Evolution of banking into nontraditional roles
Evolution of banking into nontraditional roles Expand into nontraditional areas and products to generate more fee income. Actively pursue the use of technology in the development and delivery of products. Gramm-Leach-Bliley Act eliminates most of the remaining restrictions that have separated commercial banking, investment banking,and insurance for over 70 years. 碰封价贸易大考
Evolution of banking into Evolution of banking into nontraditional roles nontraditional roles Expand into nontraditional areas and products to generate more fee income. Actively pursue the use of technology in the development and delivery of products. Gramm-Leach-Bliley Act eliminates most of the remaining restrictions that have separated commercial banking, investment banking, and insurance for over 70 years
Deregulation and Competition Many analysts attribute much of the change in the financial services industry to deregulation. Deregulation was a natural response to increased competition rather than the catalyst of competition. ■ competition between depository institutions and nondepository financial firms,and ■ competition between the same type of competitors across world markets Deregulation sped up the process,but did not necessarily start it. 的资5土号
Deregulation and Competition Deregulation and Competition Many analysts attribute much of the change in the financial services industry to deregulation. Deregulation was a natural response to increased competition rather than the catalyst of competition. competition between depository institutions and nondepository financial firms, and competition between the same type of competitors across world markets Deregulation sped up the process, but did not necessarily start it