البنوك التجارية - الفصل الثاني

Chapter Two: Commercial Banks

• This chapter focuses on commercial banks, their features, regulation, and competitors.
• The objectives of the section include defining what a commercial bank is and its features, understanding banking regulations and regulatory agencies, understanding bank mergers and banking privacy, knowing the financial service competitors of banks, distinguishing between traditional and recent banking services, and identifying trends affecting banks today.
• A bank is a financial intermediary that accepts deposits and channels them into lending activities, either directly through loans or indirectly through capital markets. It acts as a connection between those with capital deficits and those with surpluses.
• Key features of banks include dealing in money, individual company operations, accepting deposits, providing loans (advances), handling payments and withdrawals, offering agency and utility services, prioritizing profits and service, and constantly evolving their functions to connect customers through banking.

Defining Commercial Banks

• Commercial banks are financial institutions.
• They accept deposits and engage in lending activities.
• They are intermediaries between those needing capital and those with excess capital.

Banking Regulations

• Banking regulation is crucial for protecting depositors and maintaining financial stability.
• The U.S. regulates banking at both the federal and state levels.
• Banks' charters and organizational structures influence the regulations they are subject to.
• U.S. regulations also address privacy, disclosure, fraud prevention, anti-money laundering, and anti-terrorism, and promote lending to lower-income populations.
• Some cities have their own financial regulations.

Regulatory Agencies

• The Federal Reserve System (the central bank of the U.S.) is a key regulator.
• It conducts monetary policy, supervises and regulates banks, and maintains the stability of the financial system.
• It also provides financial services to U.S. and foreign institutions.
• The Federal Deposit Insurance Corporation (FDIC) is another crucial regulator.
• It insures bank deposits, examines banks for soundness, has consumer protection functions, and manages failed banks.
• The Office of the Comptroller of the Currency regulates national banks and foreign bank branches.
• The Office of Thrift Supervision (now part of the Comptroller of the Currency) oversaw certain types of financial institutions and regulatory issues related to these.

Bank Mergers and Closures

• Bank mergers often streamline operations, improve efficiency, or acquire brands.
• Banks may be closed by regulators due to unsafe or unsound business practices or inadequate financial strength.
• Failed banks are often taken over by the FDIC for a time before being sold or merged.

Banking Privacy

• Banking privacy and information security are not consistently protected in the U.S. through a single law.
• Regulations are often sector-specific.
• The Gramm-Leach-Bliley Act (GLB) is a prominent federal law governing the disclosure, collection, and use of non-public banking information.
• The Federal Trade Commission (FTC) enforces banking privacy laws through penalties for violations.

Competitors of Banks

• Important competitors of banks include savings associations, credit unions, mutual funds (investment companies), hedge funds, security brokers and dealers, investment banks, finance companies, financial holding companies, and life and property-casualty insurance companies.

Traditional and Recent Banking Services

• Traditional services include currency exchange, discounting commercial notes, lending to businesses, offering savings deposits, safekeeping valuables, supporting government activities with credit, and offering checking and trust services.
• More recent services include consumer loans, financial advice, cash management, equipment leasing, insurance policies, and retirement plans.

Trends Affecting Banks

• Service proliferation
• Increased competition
• Government deregulation
• Increased interest rate sensitivity
• Technological change and automation
• Consolidation and geographic expansion
• E-banking and e-commerce
• Convergence
• Globalization are significant trends affecting banks and other financial service firms today.

Types of Banks

• Community banks/retail banks typically have a size under $300 million, simple organizational structures, and are highly affected by the local economy, frequently having strong customer relationships and conducting relationship lending.
• Money center banks/wholesale banks are generally multi-billion dollar companies, with complex organizational structures, and serve numerous markets, diversifying themselves geographically but not necessarily locally.
• Unit banks offer all services from a single office, a common structural pattern, and are a common starting point for new banks seeking growth and resource development.
• Branch banks serve diverse locations with full service capabilities having senior management at a main office but potentially having independent managers at each location, with some functions centralized while others are decentralized.
• Electronic banks use internet banking, ATMS, and point-of-sale terminals for banking transactions.
• Virtual banks operate exclusively through the internet, frequently being able to generate cost savings, but struggling to prove consistent profitability.

European Bank Structures

• Germany's banking industry is the largest in Europe, with both private and public sector banks present.
• France is the second-largest banking center in Europe.
• Belgium has a banking system dominated by five large banks.
• Great Britain has a half dozen major banks that dominate the industry.
• Switzerland has two big banks that dominate, with other smaller companies also existing.
• Italy had privatized banking in the 1990s.

Asian Bank Structures

• China has a large government-led banking sector, with private banks growing in importance.
• Japan is dominated by four major banking groups, along side many smaller domestic and foreign banks.