Money And Banking Lecture Notes PDF
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Uploaded by Deleted User
2024
Viktor Štrba
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Summary
These lecture notes cover the topics of commercial banking, including various types, their roles in the financial system, products such as lending and financial markets, risks (liquidity and credit), and the role of a banker in a corporate bank. The document details the activities and responsibilities of financial institutions, with mention of specific activities such as offering loans and managing deposits. These notes also include examples of activities and analysis of central banks, US economics policies and their effects on the economy.
Full Transcript
MONEY AND BANKING Commercial banks and their role in the financial system Mgr. Viktor Štrba 13.11.2024 Week 8, 2024/2025 Types of a commercial banks Universal bank Corporate bank Retail bank Construc on savings bank Regional banks Credit unions Roles of a commercial bank Fi...
MONEY AND BANKING Commercial banks and their role in the financial system Mgr. Viktor Štrba 13.11.2024 Week 8, 2024/2025 Types of a commercial banks Universal bank Corporate bank Retail bank Construc on savings bank Regional banks Credit unions Roles of a commercial bank Financial intermediary Lender – offering loans to clients Deposit taker – taking deposits from clients Asset manager – managing assets of clients Trade finance – helping clients perform business (guarantees, le ers of credit) Products of a commercial bank Lending Corporate Retail Financial markets Hedging FX Treasury Cash management Trade finance Short video on Central Bank role Jerome Powell on 60 minutes in Feb 2024 Ac vity US infla on decrease to 2.4% (September) down from 2.5% US GDP growth of 2.8% (3Q24) down from 3% in 2Q24 US unemployement rate at 4.1% (October) stable m/m Divide into 3 groups 1st group FED hawkish reps 2nd group FED dovish reps 3rd group American president and his cabinet Assets and Liabili es of a commercial bank Assets Cash Securi es Loans Liabili es Deposits Borrowings/loans Capital or Net worth Profit and loss of a commercial bank Revenues Net interest Net fees Net trading Costs Administra ve including personal Provisions Key risks of a commercial bank Liquidity risk Risk of failing to allow clients to withdraw cash Failing to instantly turn assets into cash Key role of bank:Turn short-term deposits into long-term loans Mi ga on Diversifying deposits Borrowing from other banks/central bank Decreasing loans/selling securi es Key risks of a commercial bank Credit risk Risk of borrower failing to repay a loan Mi gants Credit risk analysis Diversifica on of risk/assets My role in a corporate bank Being part of lending department Key profit genera ng department Managing and minimizing/op mizing (credit) risk Providing loans Short-term - overdra Long-term – investment (amor sing) term loan Secured Unsecured My role in a corporate bank Preparing lending proposal including credit analysis Analyzing financials Acknowledging and op mizing (credit) risk Structuring financing Preparing credit documenta on Helping clients meet their needs Monitoring clients and their performance on a regular basis Ac vity Compare the two banks Choose which one, you would prefer: As an investor As a manager Explain why Key roles of bankers Reliability Trust Listening to clients and mee ng their needs Delivering on promises Being pro-ac ve
