Global Financial and Banking Systems Chapter 1

<p>It requires an agreement on terms between borrower and lender. (D)</p> Signup and view all the answers

<p>They coordinate collective lending efforts among households. (D)</p> Signup and view all the answers

<p>They facilitate cross-border capital movement. (C)</p> Signup and view all the answers

<p>They must put considerable effort into securing funds. (B)</p> Signup and view all the answers

<p>By being a borrower, provider of goods, and lender of funds. (D)</p> Signup and view all the answers

<p>They provide detailed and real-time financial and market data. (A)</p> Signup and view all the answers

<p>Establishing quality standards and organizing educational seminars. (D)</p> Signup and view all the answers

<p>By implementing stricter regulations that raise compliance costs. (B)</p> Signup and view all the answers

<p>Funding, guarantees, and research assistance. (D)</p> Signup and view all the answers

<p>Store of knowledge. (C)</p> Signup and view all the answers

<p>The 'double coincidence of wants' in bartering. (A)</p> Signup and view all the answers

<p>They can decrease overall profitability in the short term. (D)</p> Signup and view all the answers

<p>To stabilize and enhance the credibility of the financial system. (A)</p> Signup and view all the answers

<p>Conducting the country's monetary policy through interest and exchange rates (B)</p> Signup and view all the answers

<p>Setting tax rates for individuals (D)</p> Signup and view all the answers

<p>European Central Bank (C)</p> Signup and view all the answers

<p>They need to report their U.S. clients to the Internal Revenue Service (D)</p> Signup and view all the answers

<p>By supporting banks in crisis or financial distress (B)</p> Signup and view all the answers

<p>Bank for International Settlements (B)</p> Signup and view all the answers

<p>Achieving complete independence from government influence (A)</p> Signup and view all the answers

<p>Stringent anti-money laundering and anti-tax evasion efforts (B)</p> Signup and view all the answers

<p>156 (A)</p> Signup and view all the answers

<p>Banks authorized by HKMA (D)</p> Signup and view all the answers

<p>12 (D)</p> Signup and view all the answers

<p>Licensed banks (C)</p> Signup and view all the answers

<p>Internet banking (C)</p> Signup and view all the answers

<p>Banks are more likely to provide non-bank financial services than vice versa. (D)</p> Signup and view all the answers

<p>Launch of personal RMB business (B)</p> Signup and view all the answers

<p>Banks often cross-sell insurance schemes with investment elements. (A)</p> Signup and view all the answers

<p>To represent the board of directors and ensure management performance (B)</p> Signup and view all the answers

<p>Hong Kong Monetary Authority (HKMA) (A)</p> Signup and view all the answers

<p>Current, savings, and time deposits of any amount and maturity (C)</p> Signup and view all the answers

<p>HK$100 million (C)</p> Signup and view all the answers

<p>Investment firms (C)</p> Signup and view all the answers

<p>Only time deposits within certain limits (C)</p> Signup and view all the answers

<p>HK$500,000 or more (A)</p> Signup and view all the answers

<p>Insurance Authority (IA) (D)</p> Signup and view all the answers

<p>Trade finance and RMB bonds (D)</p> Signup and view all the answers

<p>A bank run at Bank of East Asia (D)</p> Signup and view all the answers

<p>Issued circulars covering rules on selling processes (B)</p> Signup and view all the answers

<p>OCBC (A)</p> Signup and view all the answers

<p>Functional and geographical consolidation (B)</p> Signup and view all the answers

<p>Organic growth model by establishing branches (D)</p> Signup and view all the answers

<p>Increase in regulatory restrictions (B)</p> Signup and view all the answers

<p>Investor losses on structured products like Lehman minibonds (A)</p> Signup and view all the answers

The movement of funds between different sectors of an economy.

Borrower gets funds directly from a lender, without an intermediary.

Funds flow through a financial intermediary, who then lends the money to the borrower.

An institution that facilitates the flow of funds between lenders and borrowers.

Households save and invest, providing funds to businesses and government.

Government spends and borrows money for economic, political, and social goals.

Countries involved in trade and investment with other countries.

Movement of capital (money) across international borders.

The four main roles money plays in an economy: unit of account, medium of exchange, and store of value.

Money acts as a standard unit for measuring and recording prices.

Money allows for buying and selling without the need for simultaneous trades (bartering).

Money keeps its value over time, acting as a way to save or store wealth.

Organizations like Bloomberg and Reuters that give real-time financial data to banks and investors.

Groups that help the financial industry by setting standards and providing training.

Governments and their regulatory bodies that oversee financial activities.

International organizations that support the global financial system, often in emerging markets.

Foreign Account Tax Compliance Act; U.S. law requiring foreign individuals and institutions to report U.S.-related financial accounts.

National authority managing a country's currency, money supply, and interest rates; also regulates commercial banks.

Actions taken by a central bank to manage a country's money supply and interest rates.

A central bank's role in ensuring the integrity of the financial system, offering support when needed.

Central bank oversight of commercial banks using tools such as reserve requirements and capital adequacy ratios.

Central bank of the United Kingdom; manages the UK's currency, interest rates, and commercial banking system.

Central bank of the United States; responsible for the US dollar, setting interest rates, and overseeing the banking sector.

Organization fostering international monetary and financial cooperation among central banks.

Hong Kong's banking system allows banks to offer a wide range of financial services, including traditional loans and deposits, securities, insurance, investments, and provident funds, creating a "universal banking" model.

Different financial services in Hong Kong are regulated by separate authorities, such as the HKMA for banking, SFC for securities, IA for insurance, and MPFA for provident funds, but they collaborate through MoUs.

Hong Kong's banking system has three tiers: Licensed Banks (LBs) with the broadest scope, Restricted License Banks (RLBs) with limited deposit acceptance, and Deposit-Taking Companies (DTCs) with further restrictions.

While both can accept time deposits, Licensed Banks have the ability to operate current and savings accounts and accept deposits of any amount and maturity, while Restricted License Banks have limits on deposit size and maturity.

DTCs, the most restricted tier, can only accept time deposits of HK$100,000 or more for a minimum of 3 months and cannot offer savings accounts.

Different tiers in Hong Kong's banking system have different minimum capital requirements: HK$300 million for LBs, HK$100 million for RLBs, and HK$25 million for DTCs.

According to the Banking Ordinance, 'banking business' goes beyond just accepting deposits and includes a wider range of activities, only allowed to Licensed Banks.

The Banking Ordinance collectively refers to Licensed Banks (LBs), Restricted License Banks (RLBs), and Deposit-Taking Companies (DTCs) as 'Authorized Institutions,' all authorized to accept deposits.

A system allowing banks in Hong Kong to offer a wide range of RMB services to businesses, including trade finance, deposits, and bonds.

A situation where many depositors withdraw their money from a bank, causing a potential liquidity crisis.

A complex financial instrument backed by a pool of debt, like mortgages, which was heavily affected by the 2008 financial crisis.

Financial products designed to offer specific returns, often with complex features and potential risks.

Guidelines issued by the Hong Kong Monetary Authority to regulate the sale of financial products and protect investors.

Mergers and acquisitions within the banking industry, leading to the formation of larger banking groups.

A strategy for a bank to expand by opening new branches or offices.

A strategy for expanding a bank's reach by both opening branches and acquiring existing banks.

Hong Kong's authorized institutions (AIs) include licensed banks (traditional and virtual), restricted licensed banks (RLBs), and deposit-taking companies (DTCs).

Virtual banks are licensed banks operating entirely online, offering banking services through digital platforms.

Restricted Licensed Banks (RLBs) include institutions like Goldman Sachs Asia Bank Limited, J.P.Morgan Securities (Asia Pacific) Limited, and Nippon Wealth Limited.

Deposit-taking companies (DTCs) include institutions like Fubon Credit (Hong Kong) Limited and Public Finance Limited.

The Hong Kong Monetary Authority (HKMA) maintains a register of all AIs, including their names and business locations.

Financial institutions often offer a range of products and services beyond their core business, like banks selling insurance or investment products.

Besides banks, other financial institutions like consumer finance companies and property developers provide loans to customers.

Only institutions authorized by the HKMA can engage in deposit-taking and providing checking accounts, making banking a regulated industry.