bank ch 1

why do gov regulate banks

gov regulate bank because they essential to maintaing the economies and because they guarantee the safety and stability of the money supply and the country as much as possible. also because they want to protract the bank and people to make the bank are treating them right

depository intermediaries

holds funds for the public and uses the funds to finance their business

innovative

home-equity load- secured by the difference between the value of a home and the amount the homeowner still owes on it

guaranteeing the money

in the U.S bank and gov work together to form the banking system and to make sure the money supply is adequate , appropriate and trustworthy - this is backed through the central banking function of the federal reserve

non depository

insurance companies, finance companies, and securities firms and investment companies provide certain financial services but don't accept traditional deposits

depository intermediaries

...

essential,econmies

...

geographic region, social, religious association

...

reliable

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technology

...

there are four type of depository institution

...

bank encourage them to so by

protecting their money and paying interest

commercial bank

provide familiar such as checking and saving accounts,credit cards, investment service and other

...

sometime called thrift institution - regulated and protected by the state or federal gov but non-depositer

a great part of an economic system is

psychological- it your belief/ trust in the financial system to make you willing to borrow and pay later

...

receive most of the there deposits from individual's grew by focusing on real estate lending for people - owed by depositor

keeping your money safe/ safeguarding

record keeping an important part of securing your money -keep careful track of your money Identification -bank officials work closely with technology experts and law enforcement agencies to prevent identity fraud involving conventional checking accounts to online banking or shopping Transfer security -high-tech sound business practices-good judgment-invest time ans money in training employees in procedures and practices to ensure accuracy -good decision about whom to extend credit -

bank have other fund

safe deposit box account maintence fee for checking account , online bill payment - atm transaction

bank is a financial intermediary for the

safeguarding,transferring,exchanging or lending of money

commercial banks

Privately owned financial institutions that accept demand deposits and make loans and provide other services for the public

non depository intermediaries

accept funds from businesses and individuals which are then invested. have far more predictable cash inflows and outflows which allows investment in long-term securities.-types: insurance companies, pension funds, investments companies

in what way is a bank like any other business? in what is it way is it different from other businesses

a bank is like any other business because they sell their service to consumer to earn money and they market and manage those service in a competitive field. they like any business that much earn profit to survive and a bank is unlike any other business because they do not produce goods they only handle money for people

lending

credit card

smart card

credit, debit-embedded with microchips in them

spread

difference between what a bank pays in interest and what it receive in interest

currency exchanges

don't accept deposits or make loans. Used to cash government checks and obtain money orders. Earn profit through charging fee for services. Located in areas where there are no other financial institutions

online banking

electronic banking , home banking or pc banking - allow customer to perform banking transaction from there home computer, everything for balance checking ,bill paying,applying for loan

many professional money manger regard insurance as

essential financial protraction

central bank

gov bank that manage ,regulate and protect both the money supply and bank itself -federal reserve system

saving and loan association

A financial instituion that provides loans and mortgages to customers who hold a saving acount

credit union

A financial institution owned by its members that provides savings and checking accounts and other services to its membership at low fees.

brokerage houses

Employ market analysts to research firms to find strengths and weaknesses of businesses looking for financial investors. Almost all investment banks operate as brokers. Charge a commission on purchases and sales.

asset

anything of value- ex money

liquid asset

anything thing that can readily be exchange

intranet is a

private network that uses internet tools and software to store forms, data and program for internal use by a company

ATM

automated teller machines- customer can now perform almost any banking function from it . and from any where in the world

reserve system is the

bank back up if everything goes wrong

creditworthiness

bank evaluating the creditworthiness of customer because their profit depend upon being repaid the principal and interest from loans. if a bank were to overextend themselves with unpaid load, they would begin to fail and if they fail they economy is at risk-great depression

trust companies

businesses that manage people's money and property for them.the money grow form the investment made my the administrator not from interest pay on them

liability

cash obligation - ex- deposit

deregulation

law that pass in the 1980 that loosened the restriction on banker and let them compete in the open market like other financial business

bank assets

loan-investment

new services

one the biggest of deregulation was that bank move into news area of business which led them to offering more financial service such as credit card, innovative lending option and technology related service

what challenges do you think the trend toward mergers poses toward banks? what skills will these challenges require of those making career in banking

opportunities to handle more money efficiently is increasing . they require thorough understanding of how the system and its tool work and how money move in an creasingly complex economy

mutual saving bank

organized mainly for savings accounts/making loans to home buyers

depositor

people who put money into the bank

loan companies

private companies who lend money and make a profit on the interest make loan to customer when other financial institution would will not but charge higher interest rate to offset the risk

they are popular because interest on them is

tax-deductible for consumer

transferring

this motion of money throughout the nation and world allow businesses to have access to capital - with capital to invest -businesses can expand-job are created -product get manufactured -services are performed and the economy grows

retail bank

thrift institution such as mutual saving bank,saving and loans and credit unions were developed to help people not served by commercial bank save money, get loans and invest

profit

what left of revenue affer costs are deducted

merger

when bank join together- bank are larger and fewer