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finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. As of 2004, the financial services industry represented 20% of the market capitalization of the S&P 500 in the United States.
 History of financial services
 In the United States
The term "financial services" became more prevalent in the United States partly as a result of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different types of companies operating in the U.S. financial services industry at that time to merge. Companies usually have two distinct approaches to this new type of business. One approach would be a bank which simply buys an insurance company or an investment bank, keeps the original brands of the acquired firm, and adds the acquisition to its holding company simply to diversify its earnings. Outside the U.S. (e.g., in Japan), non-financial services companies are permitted within the holding company. In this scenario, each company still looks independent, and has its own customers, etc. In the other style, a bank would simply create its own brokerage division or insurance division and attempt to sell those products to its own existing customers, with incentives for combining all things with one company.
Main article: Bank A "commercial bank" is what is commonly referred to as simply a "bank". The term "commercial" is used to distinguish it from an "investment bank," a type of financial services entity which, instead of lending money directly to a business, helps businesses raise money from other firms in the form of bonds (debt) or stock (equity).
 Banking services
The primary operations of banks include:
y y y
Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business)
such as a cashier's check or certified check. assist company deals (advisory services. and restructure debt into structured finance products.y y y y y y y y y Issuance of credit cards and processing of credit card transactions and billing Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using Automatic Teller Machines (ATMs) Provide wire transfers of funds and Electronic fund transfers between banks Facilitation of standing orders and direct debits.where clients can purchase and sell foreign currency banknotes. Private banks often provide more personal services.bank that underwrite debt and equity. Foreign Currency Banking . Bank Of America is the largest issuer of bank cards.where clients can send funds to international banks abroad. Many financial services firms require a person or family to have a certain minimum net worth to qualify for private banking services. Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly. such as wealth management and tax planning. Bank cards .include both credit cards and debit cards.Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades.  Investment services y y Asset management .  Foreign exchange services Foreign exchange services are provided by many banks around the world. . generally registered with the Securities and Exchange Commission as Registered Investment Advisors. Foreign exchange services include: y y y Currency Exchange . underwriting and advisory fees).the term usually given to describe companies which run collective investment funds. Also refers to services provided by others. Hedge fund management .Companies which provide credit card machine and payment networks call themselves "merchant card providers".banking transactions are done in foreign currency. Capital market bank . Notary service for financial and other documents  Other types of bank services y y y y Private banking . so payments for bills can be made automatically Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account. Wire transfer .Private banks provide banking services exclusively to high net worth individuals. Credit card machine services and networks . Provide a check guaranteed by the Bank itself and prepaid by the customer. than normal retail banks.
Underwriters may also offer similar commercial lines of coverage for businesses. wholesale banking. Insurance underwriting .  Insurance y y y Insurance brokerage .y Custody services . The most successful private equity funds can generate returns significantly higher than provided by the equity markets Venture capital is a type of private equity capital typically provided by professional. investment banking. is an affluent individual who provides capital for a business start-up. etc. and investment management funds.Reinsurance is insurance sold to insurers themselves. health insurance. Primarily internet-based companies are often referred to as discount brokerages. Angel investment .Insurance brokers shop for insurance (generally corporate property and casualty insurance) on behalf of customers. retail banking. which usually take controlling equity stakes in businesses that are either private. health insurance. asset management.These services involve stock brokers (private client services) and discount brokers. Private equity . Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest.. A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses . life insurance. Assets under custody in the world are approximately $100 trillion. Recently a number of websites have been created to give consumers basic price comparisons for services such as insurance. retirement insurance.the safe-keeping and processing of the world's securities trades and servicing the associated portfolios. insurance brokers. wealthy individuals. Activities include insurance and annuities.  Other financial services y y y y y Intermediation or advisory services . such as large companies. Stock brokers assist investors in buying or selling shares. and property & casualty insurance.An angel investor or angel (known as a business angel or informal investor in Europe). life insurance. Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. Conglomerates . causing controversy within the industry. a service still offered primarily through agents. to protect them from catastrophic losses. high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business. although many now have branch offices to assist clients.g. outside investors to new.A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e.Private equity funds are typically closed-end funds. and stock brokers. These brokerages primarily target individual investors. Reinsurance . usually in exchange for convertible debt or ownership equity. general insurance. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital. or taken private once acquired.Personal lines insurance underwriters actually underwrite insurance for individuals.
credit cards or in some cases merchant accounts. an electronic database. As a consequence. Financial system is the system that allows the transfer of money between savers and borrowers. debt settlement and refinancing. but do not want to file bankruptcy and wish to payoff their debts owed.There are ¿ve key aspects to ¿nancial controls and monitoring. economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts. Yet the form of these financial systems varies widely. instruments. and they enable households and firms to share risks. markets. practices. Accounting records should be consistent. This debt can be accrued in various ways including but not limited to personal loans. bad things don't always happen at the same time. Debt resolution is a consumer service that assists individuals that have too much debt to pay off as requested.  Financial Controls and Monitoring Financial controls and monitoring methods have a dual role in supporting internal needs and external requirements. They channel household savings to the corporate sector and allocate investment funds among firms. It comprises a set of complex and closely interconnected financial institutions. There are many services/companies that can assist with this. Your organization needs to be able to demonstrate what funds were received and how funds were spent. This is important in case the organization is audited or if a funder requests information for a speci¿c item or transaction. and copying all records in a virtual library. they allow intertemporal smoothing of consumption by households and expenditures by firms.y are aggregated i. These include: y Accounting Records (or Accounts Receivable and Payable): Establish a process that records every ¿nancial transaction by maintaining paper ¿les. services. Choose a method and regular schedule for tracking income and expenses that works for your organization. and transactions. These functions are common to the financial systems of most developed economies. Financial systems are crucial to the allocation of resources in a modern economy. dates of receipt of funds. notes .e. A separate accounting system should be developed for funding from foundations with the original proposal and budget. These can include debt consolidation. A system should also be developed to track donations from individuals to keep donors updated of the organization¶s progress or to solicit annual and repeat contributions.
and reporting requirements so that you can respond to funders¶ requests for ¿nancial records or in case of audits. and agree upon and ensure that internal controls are implemented.on allowable expenditures. y Internal Controls: Controls are organizational practices that help safeguard your assets and ensure that money is being handled properly. Planning also enables you to make projections and set targets. sometimes called management reports allow you to be forward thinking as you assess the ¿nancial status of the organization and what will be needed to realize your goals. y Financial Planning: Financial planning converts your organization¶s objectives into a budget. y Governing Board: A governing board. Financial planning allows you to review your organization. ¿nancial monitoring and reviews. your organization can create internal reports that help monitor progress by comparing budgets to actual expenses. . serves as stewards of an organization¶s resources. y Financial Monitoring and Reporting: Drawing from the information in the accounting records. Internal reports. Controls help detect errors in accounting. The board treasurer who has skills in accounting should be the lead person in working with the staff in ensuring ¿nancial accountability. It is a public record for funders of how you intend to spend the funds received. Frequent reviews and monitoring allows the governing board and staff to measure your organization¶s progress and helps inform decision-making about the organization¶s or a project¶s future. examining successes and challenges in the past. Governing boards should participate in approving budgets. whether comprised by a board of directors or leadership from the community. and help support the people responsible for handling your organization¶s ¿nances. Accounting records are also the source for creating external ¿nancial reports that demonstrate to funders and other stakeholders how funds have been spent. The budget serves as a critical planning guide for your staff and governing board. Funders may require ¿nancial reports at the completion of the project or periodically during the project¶s implementation. informing strategies for future success. prevent fraud or theft.
Established 1 April 1935 Governor Duvvuri Subbarao Main Functions Reserve Bank of India regional office. The RBI Regional Office in Delhi.Reserve Bank of India (RBI. It is a member bank of the Asian Clearing Union. 1934 and plays an important part in the development strategy of the government. .21 billion (2010) of currency reserves. Delhi entrance with the Yakshini sculpture depicting "Prosperity through agriculture". Hindi: ê÷íâùì í ð éÓ) is the central banking system of India and controls the monetary policy of the rupee as well as US$300. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act.
to maintain the currency and credit system of the country to utilize it in its best advantage. The national economy depends on the public sector and the central bank promotes an expansive monetary policy to push the private sector since the financial market reforms of the 1990s. 1999. Some of this problems are results of the dominant part of the public sector. and to maintain the reserves. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. because both objectives are diverse in themselves. The basic objectives of RBI are to issue bank notes.The RBI Regional Office in Kolkata. implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors.  Related functions . The institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the country's banking and financial system functions.  Developmental role The central bank has to perform a wide range of promotional functions to support national objectives and industries.  Monetary Authority The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. Objectives are to maintain public confidence in the system. monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins. The RBI faces a lot of inter-sectoral and local inflation-related problems. protect depositors' interest and provide cost-effective banking services to the public. It formulates.  Issuer of currency The bank issues and exchanges or destroys currency and coins not fit for circulation. Objectives are maintaining price stability and ensuring adequate flow of credit to productive sectors. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development. The RBI controls the monetary supply.The Objectives are giving the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP.  Manager of exchange control The central bank manages to reach the goals of the Foreign Exchange Management Act.
. The interest rate the RBI charges the banks for this purpose is called bank rate. The recent financial turmoil world-over.  RBI has various tools to control which are listed below (a) Bank Rate: RBI (Reserve Bank of India) lends to the commercial banks through its discount window to help the banks meet depositor¶s demands and reserve requirements. owing to the sprawling mandate described above. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition. central banks use open market operations. Generally RBI uses three kinds of selective credit controls: a) Minimum margins for lending against specific securities. An increase in CRR will make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will in turn decrease the money supply. It also acts as their banker. RBI is far out of touch with such a principle.The RBI is also a banker to the Government and performs merchant banking function for the central and the state governments. b) Ceiling on the amounts of credit for certain purposes. RBI can vary this rate between 3% and 15%. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to affect a decrease or an increase in the money supply. The RBI is resorting more to open market operations in the more recent years. In the open money market. it will decrease the bank rate and if it wants to reduce the liquidity and money supply in the system. If the RBI wants to increase the liquidity and money supply in the market. RBI has stepped up liquidity requirements for two reasons: . (c) Statutory Liquidity Requirements (SLR): Apart from the CRR. banks are required to maintain liquid assets in the form of gold. c) Discriminatory rate of interest charged on certain types of advances. government securities are traded at market related rates of interest. it will increase the bank rate. This will reduce the size of their deposits and they will lend less. has however. cash and approved securities. There is now an international consensus about the need to focus the tasks of a central bank upon central banking.buying and selling of eligible securities by central bank in the money market. vindicated the Reserve Bank's role in maintaining financial stability in India. In well developed economies. A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities. The institution maintains banking accounts of all scheduled banks. (b) Cash Reserve Requirements (CRR): Every commercial bank has to keep certain minimum cash reserves with RBI.to influence the volume of cash reserves with commercial banks and thus influence the volume of loans and advances they can make to the commercial and industrial sectors. too.Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances ± thus it is an anti-inflationary impact.
all of its decisions must be guided by a commitment to promote foreign investment. in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. are administratively set. y y y y y y 4 Voting power 5 Poverty reduction strategies 6 Clean Technology Fund management 7 Clean Air Initiative 8 United Nations Development Business 9 Criticism y y y y y World Bank 9. which dominated negotiations. The International Monetary Fund. c) Banks are required to lend to the priority sectors to the extent of 40% of their advances. The most powerful countries in attendance were the United States and United Kingdom. The is an international financial institution that provides loans to developing countries for capital programmes.C. headed by an American.2 Structural adjustment 9. international trade and facilitate capital investment. By law.4 Sovereign immunity 9.Direct credit controls in India are of three types: a) Part of the interest rate structure i. b) Banks are mandatorily required to keep 25% of their deposits in the form of government securities. the World Bank is. on small savings and provident funds. The World Bank has a stated goal of reducing poverty.5 Environmental strategy . D.1 Knowledge production 9.3 Water privatization 9. a related institution. by custom. Although both are based in Washington.. Delegates from many countries attended the Bretton Woods Conference.e. is the second. The World Bank differs from the World Bank Group. while the IMF is led by a European.
mainly to poorer countries. ADB was modeled closely on the World Bank. The bank admits the members of the UN Economic Commission for Asia and the Far East (now UNESCAP) and nonregional developed nations. From 31 members at its establishment. and has a similar weighted voting system where votes are distributed in proportion with member's capital subscriptions.of which 48 are from within Asia and the Pacific and 19 outside. D.C. United States. the free encyclopedia Jump to: navigation. search Asian Development Bank ADB logo Motto Fighting poverty in Asia and the Pacific . in particular those with an impact on exchange rate and the balance of payments. restructuring or aid.The International Monetary Fund (IMF) is the intergovernmental organization that oversees the global financial system by following the macroeconomic policies of its member countries. The IMF's relatively high influence in world affairs and development has drawn heavy criticism from some sources The Asian Development Bank (ADB) is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia. both USA and Japan hold 552.756 percent each Asian Development Bank From Wikipedia. Its headquarters are in Washington.210 shares . At present. ADB now has 67 members ..the largest proportion of shares at 12. It is an organization formed with a stated objective of stabilizing international exchange rates and facilitating development through the enforcement of liberalising economic policies on other countries as a condition for loans. It also offers loans with varying levels of conditionality.
adb.Formation Type Legal status 22 August 1966 Regional organization Treaty Purpose/focus Crediting Mandaluyong City. Philippines Headquarters Region served Asia-Pacific Membership President Main organ Staff Website 67 countries Haruhiko Kuroda Board of Directors 2. Metro Manila.500+ http://www.org Asian Development Bank member states Outside regions Asia-Pacific region .
or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. (July 2008) Foreign exchange Exchange rates Currency band Exchange rate Exchange rate regime Fixed exchange rate Floating exchange rate Linked exchange rate Markets Foreign exchange market Futures exchange Retail forex Products Currency Currency future Non-deliverable forward Forex swap Currency swap Foreign exchange option Historical agreements Bretton Woods Conference Smithsonian Agreement Plaza Accord Louvre Accord See also Bureau de change / currency exchange (office) The foreign exchange market (forex. with the exception of weekends.Foreign exchange market From Wikipedia. The foreign exchange market determines the relative values of different currencies. FX. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock. the free encyclopedia Jump to: navigation. Please help improve this article by adding reliable references. . search This article needs additional citations for verification. Unsourced material may be challenged and removed.
the low margins of relative profit compared with other markets of fixed income. leading to high liquidity. by allowing businesses to convert one currency to another currency. In a typical foreign exchange transaction. which remained fixed as per the Bretton Woods system. and facilitates the carry trade. the variety of factors that affect exchange rates. It also supports speculation.The primary purpose of the foreign exchange is to assist international trade and investment. a growth of approximately 20% over the $3. and which (it has been claimed) may lead to loss of competitiveness in some countries.98 trillion. . For example. it has been referred to as the market closest to the ideal of perfect competition. it permits a US business to import British goods and pay Pound Sterling.21 trillion daily volume as of April 2007. in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies. The modern foreign exchange market began forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. average daily turnover in global foreign exchange markets is estimated at $3. As such. According to the Bank for International Settlements.e. and the use of leverage to enhance profit margins with respect to account size. its continuous operation: 24 hours a day except weekends. a party purchases a quantity of one currency by paying a quantity of another currency. The foreign exchange market is unique because of y y y y y y its huge trading volume. i. its geographical dispersion. as of April 2010. even though the business's income is in US dollars. notwithstanding currency intervention by central banks.