Banks and Bank Management

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(consumers) (business)
(
)

(receives)
(collects)
(transfers)
(pays)
(exchanges)
(lends)
(invests)
(safeguards)

(Central Banks)

(Commercial Banks)

()
()

(Specialize Banks)


(Wholesale Banks)


(Retail Banks)


(Investment Banks)

 (Merchant Banks)

(Private Banks)

(International Banks)
(commercial banks
parent)

(Saving Banks)/mutual saving banks (MSBs)

SLAs
(saving and loan associations SLAs)


( mutual)

(credit union)

(members)

(Microfinance Institutions)

(Postal Saving Banks)

 (Community Development Banks)

(Money Central Banks)

(Bank for International
Settlements)
(Affiliated banks)

10

The World Bank and the IMF

World Bank (
)
The International Monetary Fund (IMF):

(international payments)

11

Virtual Banks

internet

Universal Banks

Bankers Banks

(
)

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Deposits
1.
2.
3.
4.

demand deposits,
savings deposits,
hybrid checking/savings deposits/NOW, and
time deposits

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Credit
1.
2.
3.
4.
5.
6.
7.

commercial or merchantile credit

industrial credit
consumer or personal credit
real estate credit
bank credit
Public or government credit
International credit

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Cash Management and Other Services

o Other Services

o foreign currency exchange,

o safety deposit boxes/store valuables,
o certification of value,
o transfer money and securities,
o credit life insurance (pays off loans),

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Cash Management and Other Services
o Other Services

o trust services,
o financial advisory services,
o equipment leasing services,
o start-up companies loans
o selling retirement plan

16

Cash Management and Other Services

Cash Management
o allow businesses to make efficient use of their cash,
o allow the business to earn interest on its money
sooner

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The payments
Investment Bankinng
Securities Brokerages
Financial Planning
Merchant Banking

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1.
2.
3.
4.
5.
6.
7.
8.

The Intermediation Role

The Payment Role
The Guarantor Role
Safekeeping/Certification of Value Role
Saving/Investment AdvisoryRole
Agency Role
Risk Management Role
The Policy Role

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( , , page18-19 )

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A bank's balance sheet is simply a list of a

bank's assets and liabilities where
total assets = total liabilities + capital.
Banks Balance Sheet
Assets

Liabilities & Capital

Cash & cash equivalent

Deposit accounts

Investment

Borrowing funds

Loans

Total liabilities

Other assets
Total

Capital
100%

Total liabilities & Capital 100%

21

(Evaluation
Banks
interest
revenues
Managing the
banks response
to changing
interest rate

Banks net
interest
margin

Banks
interest cost
Market value of
banks assets

Market value
of banks
liabilities

Banks
investment
value,
profitability,
and risk

Banks net
worth capital

22

(Risk Management)

1. Credit Risk
2. Market Risk
Interest rate risk
FX rate risk

3. Liquidity Risk
4. Earning Risk
5. Insolvency Risk

23

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