货币银行学PPT 米什金 [兼容模式]

Chapter 13 Banking Industry: Structure andCompetitionHistorical Development of theBanking System•Bank of North America chartered in 1782•Controversy over the chartering of banks.•National Bank Act of 1863 creates a new banking system of federally chartered banksg y y–Office of the Comptroller of the Currency–Dual banking system•Federal Reserve System is created in 1913.Figure 1 Time Line of the Early History of Commercial Banking in the United StatesPrimary Supervisory Responsibility ofBank Regulatory Agencies•Federal Reserve and state banking authorities: state banks that are members of the Federal Reserve System.the Federal Reserve System•Fed also regulates bank holding companies.•FDIC: insured state banks that are not Fed members.•State banking authorities: state banks without FDIC insurance.without FDIC insuranceFinancial Innovation and the Growthof the Shadow Banking Systemof the “Shadow Banking System”•Financial innovation is driven by the desire to earn profits•A change in the financial environment will stimulate a search by financial institutions for innovations that are likely to be profitable–Financial engineeringResponses to Changes in DemandConditions: Interest Rate Volatility •Adjustable rate mortgagesAdjustable-rate mortgages–Flexible interest rates keep profits high whenrates rise–Lower initial interest rates make them attractiveyto home buyers•Financial Derivatives–Ability to hedge interest rate risk–Payoffs are linked to previously issued (i.e.derived from) securities.Responses to Changes in SupplyConditions: Information Technology •Bank credit and debit cards–Improved computer technology lowerstransaction costs•Electronic banking–ATM, home banking, ABM and virtual bankingATM home banking ABM and virtual banking •Junk bonds•Commercial paper marketResponses to Changes in SupplyConditions: Information Technologygy (cont’d)•SecuritizationS iti ti–To transform otherwise illiquid financial assetsinto marketable capital market securities.i t k t bl it l k t iti–Securitization played an especially prominent role in the development of the subprime mortgagemarket in the mid 2000s.Avoidance of Existing Regulations: Loophole Mining•Reserve requirements act as a taxR i t t ton deposits•Restrictions on interest paid on deposits ledto disintermediation•Money market mutual funds•Sweep accountsFinancial Innovation and theDecline of Traditional Banking •As a source of funds for borrowers, market share has fallen•Commercial banks’ share of total financial intermediary assets has fallen•No decline in overall profitabilityIncrease in income from off-balance-sheet •Increase in income from off balance sheet activitiesFigure 2 Bank Share of TotalNonfinancial Borrowing, 19602011Nonfinancial Borrowing 1960–2011Source: Federal Reserve Flow of Funds; /releases/z1/Current/z1.pdf. Flow of Funds Accounts; Federal Reserve Bulletin.Financial Innovation and the Decline of Traditional Banking (cont d)of Traditional Banking (cont’d)g q g•Decline in cost advantages in acquiring funds (liabilities)–Rising inflation led to rise in interest rates anddisintermediation–Low-cost source of funds, checkable deposits, declined inimportance•Decline in income advantages on uses of funds (assets)–Information technology has decreased need for banks toI f ti t h l h d d d f b k tfinance short-term credit needs or to issue loans–Information technology has lowered transaction costs forother financial institutions, increasing competitionother financial institutions increasing competitionBanks’ Responses•Expand into new and riskier areas of lending –Commercial real estate loans–Corporate takeovers and leveraged buyoutsC t t k d l d b t •Pursue off-balance-sheet activities–Non-interest income–Concerns about riskStructure of the U.S. Commercial Banking Industry•Restrictions on branchingR t i ti b hig g–McFadden Act and state branching regulations.•Response to ranching restrictions–Bank holding companies.–Automated teller machines.Table 1 Size Distribution of Insured Commercial Banks, March 30, 2011Table 2 Ten Largest U.S. Banks, December 30, 2010December 30 2010Bank Consolidation andNationwide Banking•The number of banks has declined over the last 25 yearsBank failures and consolidation.–Bank failures and consolidation–Deregulation: Riegle-Neal Interstate Bankingand Branching Efficiency Act f 1994and Branching Efficiency Act f 1994.–Economies of scale and scope fromo at o tec o ogyinformation technology.•Results may be not only a smaller number of banks but a shift in assets to much larger banks.Benefits and Costs of BankConsolidation•Benefits–Increased competition, driving inefficient banks outof business–Increased efficiency also from economies of scale andscope–Lower probability of bank failure from more diversifiedportfolios•Costs–Elimination of community banks may lead to less lending to small business–Banks expanding into new areas may take increased risksi kB k di i k i dand failFigure 3 Number of Insured Commercial Banks in the United States, 1934–2010 (Third Quarter)(Thi d Q t)Source: /qbp/qbpSelect.asp?menuitem=STAT.Separation of the Banking and OtherFinancial Service Industriesg•Erosion of Glass-Steagall Act–Prohibited commercial banks from underwritingcorporate securities or engaging in brokerageactivities–Section 20 loophole was allowed by the FederalR bli ffili t f dReserve enabling affiliates of approvedcommercial banks to underwrite securities aslong as the revenue did not exceed a specifiedamountp–U.S. Supreme Court validated the Fed’s actionin 1988Separation of the Banking and Other Financial Service Industries (cont’d)Financial Service Industries (cont d)G amm Leach Blile Financial Se ices •Gramm-Leach-Bliley Financial Services Modernization Act of 1999Ab li h Gl St ll–Abolishes Glass-Steagall –States regulate insurance activities –SEC keeps oversight of securities activities –Office of the Comptroller of the Currency regulates bank subsidiaries engaged in securities underwriting F d lR b k h ldi–Federal Reserve oversees bank holding companiesSeparation of Banking and Other Financial Services Industries Throughout the World•Universal banking–No separation between banking and securitiesindustries•British-style universal banking–May engage in security underwriting•Separate legal subsidiaries are common•Bank equity holdings of commercial firms are lesscommon•Few combinations of banking and insurance firmsSeparation of Banking and Other Financial Services Industries Throughout the World (cont’d)•Some legal separation–Allowed to hold substantial equity stakes in commercialfirms but holding companies are illegalStructure•Savings and Loan Associations–Chartered by the federal government or by states–Most are members of Federal Home Loan Bank os a e e be s o ede a o e oa aSystem (FHLBS)–Deposit insurance provided by Savings AssociationInsurance Fund (SAIF) part of FDICInsurance Fund (SAIF), part of FDIC–Regulated by the Office of Thrift Supervision •Mutual Savings Banks–Approximately half are chartered by states–Regulated by state in which they are located–Deposit insurance provided by FDIC or state insuranceStructure (cont’d)•Credit Unions–Tax-exempt–Chartered by federal government or by states–Regulated by the National Credit Union Administration(NCUA)–Deposit insurance provided by National Credit Union Share Insurance Fund (NCUSIF)International Banking g•Rapid growth–Growth in international trade and multinational corporationsp–Global investment banking is very profitabley p–Ability to tap into the Eurodollar marketEurodollar MarketDollar denominated deposits held in banks •Dollar-denominated deposits held in banks outside of the U.S.•Most widely used currency in international M t id l d i i t ti l trade•Offshore deposits not subject to regulations •Important source of funds for U.S. banksI t t f f d f U S b kStructure of U.S. BankingOverseas•Shell operationSh ll ti•Edge Act corporation•International banking facilities (IBFs) ot subject to egu at o a d ta es –Not subject to regulation and taxes–May not make loans to domestic residentsForeign Banks in the U.S.•Agency office of the foreign bank–Can lend and transfer fund in the U.S.–Cannot accept deposits from domestic residents –Not subject to regulations•Subsidiary U.S. bankS b idi U S b k–Subject to U.S. regulations–Owned by a foreign bankForeign Banks in the U.S. (cont’d)•Branch of a foreign bank–May open branches only in state designated as home state or in state that allow entry of out-of-state banks–Limited-service may be allowed in any other statej g•Subject to the International Banking Act of 1978•Basel Accord (1988)–Example of international coordination of bank regulation p g –Sets minimum capital requirements for banksTable 3 Ten Largest Banks in the World, 2011World 20119)Before 1863,A) banks acquired funds by issuing bank notes.B) banks were chartered by state banking commissions.C) federally chartered banks had regulatoryC) federally-chartered banks had regulatory advantages not granted to state-chartered banks. )D) all of the above.E) only (a) and (b) of the above.15)Which bank regulatory agency has thesole regulatory authority over bank holding companies?A)The FDICB) The Comptroller of the CurrencyB) Th C t ll f th CC) The FHLBSD) The Federal Reserve System18)The Federal Reserve Act required all _____ banksThe Federal Reserve Act required all banks to become members of the Federal ReserveSystem, while _____ banks could choose tobecome members of the system.A)state; nationalB) state; municipalC) national; stateD) national; municipal27)The large number of banks in the United States is an indication of)g p g yA) vigorous competition within the banking industry.B) lack of competition within the banking industry.C) only efficient banks operating within the United States.)D) none of the above.)28)The McFadden Act of 1927A) effectively prohibited banks from branching across state lines.B) required that banks maintain bank capital equal to at least 6 percent of their assets.C) effectively required that banks maintain a correspondent relationship with large money center banks.D) did all of the above.37)Which of the following is not a reason for the rapid expansion of international banking.bankingA) The rapid growth in international trade.B) The desire for U.S. banks to expand.B) Th d i f U S b k t dC) The growth of multinational corporations.D) None of the above.47)Although it has a population about half that of the United States, Japan hasA) many more banks.A) many more banksB) only 10 percent of the number of banks.C) only 5 percent of the number of banks. )y pD) only 1 percent of the number of banks.61)The process in which people take theirmoney out of financial institutions seeking higher interest rates is calledA)capital mobility.B) loophole mining.B) l h l i iC) disintermediation.D) deposit jumping.65)The most important developments that have reduced banks' cost advantages in the p y ypast twenty years include:A) the growth of the junk bond market.B) the competition from money market mutual funds.C) the growth of securitization.D) all of the above.66)The most important developments that have reduced banks' income advantages in p y ythe past twenty years include:A) the growth of the commercial paper market.B) the growth of the junk bond market.C) the growth of securitization.D) all of the above.E) only (a) and (b) of the above.E) only (a) and (b) of the above78)The process of transforming otherwise illiquid financial assets into marketablepcapital market instruments is know asA) securitization.B) internationalization.C) arbitrage.D) program tradingD) program trading.E) none of the above.。