商业银行管理ROSE7e课后答案Chapter1.docx

商业银行管理ROSE7e课后答案Chapter1.docx

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商业银行管理ROSE7e课后答案Chapter1

CHAPTER1

ANOVERVIEWOFBANKSANDTHEFINANCIAL-SERVICESSECTOR

GoalofThisChapter:

Inthischapteryouwilllearnaboutthemanyrolesfinancialserviceprovidersplayintheeconomytoday.Youwillexaminehowandwhythebankingindustryandthefinancialservicesmarketplaceasawholeisrapidlychanging,becomingnewanddifferentaswemoveforwardintothefuture.Youwillalsolearnaboutnewandoldservicesofferedtothepublic.

KeyTopicsinThisChapter

∙PowerfulForcesReshapingtheIndustry

∙WhatisaBank?

∙TheFinancialSystemandCompetingFinancial-ServiceInstitutions

∙OldandNewServicesOfferedtothePublic

∙KeyTrendsAffectingAllFinancial-ServiceFirms

∙Appendix:

CareerOpportunitiesinFinancialServices

ChapterOutline

I.Introduction:

PowerfulForcesReshapingtheIndustry

II.WhatIsaBank?

A.DefinedbytheFunctionsItServesandtheRolesItPlay:

B.BanksandtheirPrincipalCompetitors

C.LegalBasisofaBank

D.DefinedbytheGovernmentAgencyThatInsuresItsDeposits

III.TheFinancialSystemandCompetingFinancial-ServiceInstitutions

A.SavingsAssociations

B.CreditUnions

C.MoneyMarketFunds

D.MutualFunds

E.HedgeFunds

F.SecurityBrokersandDealers

G.InvestmentBankers

H.FinanceCompanies

I.FinancialHoldingCompanies

J.LifeandProperty/CasualtyInsuranceCompanies

IV.TheServicesBanksandManyofTheirClosestCompetitorsOfferthePublic

A.ServicesBanksHaveOfferedThroughoutHistory

1.CarryingOutCurrencyExchanges

2.DiscountingCommercialNotesandMakingBusinessLoans

3.OfferingSavingsDeposits

4.SafekeepingofValuablesandCertificationofValue

5.SupportingGovernmentActivitieswithCredit

6.OfferingCheckingAccounts（DemandDeposits）

7.OfferingTrustServices

B.ServicesBanksandManyofTheirFinancial-ServiceCompetitorsHaveOfferedMoreRecently

1.GrantingConsumerLoans

2.FinancialAdvising

3.ManagingCash

4.OfferingEquipmentLeasing

5.MakingVentureCapitalLoans

6.SellingInsurancePolicies

7.SellingRetirementPlans

C.DealinginSecurities:

OfferingSecurityBrokerageandInvestmentBankingServices

1.OfferingSecurityUnderwriting

2.OfferingMutualFundsandAnnuities

3.OfferingMerchantBankingServices

4.OfferingRiskManagementandHedgingServices

V.KeyTrendsAffectingAllFinancial-ServiceFirms

A.ServiceProliferation

B.RisingCompetition

C.GovernmentDeregulation

D.AnIncreasinglyInterest-SensitiveMixofFunds

E.TechnologicalChangeandAutomation

F.ConsolidationandGeographicExpansion

G.Convergence

H.Globalization

VI.ThePlanofThisBook

VII.Summary

ConceptChecks

1-1.Whatisabank?

Howdoesabankdifferfrommostotherfinancial-serviceproviders?

Abankshouldbedefinedbywhatitdoes;inthiscase,banksaregenerallythosefinancialinstitutionsofferingthewidestrangeoffinancialservices.Otherfinancialserviceprovidersoffersomeofthefinancialservicesofferedbyabank,butnotallofthemwithinoneinstitution.

1-2.UnderU.S.lawwhatmustacorporationdotoqualifyandberegulatedasacommercialbank?

UnderU.S.law,commercialbanksmustoffertwoessentialservicestoqualifyasbanksforpurposesofregulationandtaxation,demand（checkable）depositsandcommercialloans.Morerecently,CongressdefinedabankasanyinstitutionthatcouldqualifyfordepositinsuranceadministeredbytheFDIC.

1-3.Whyaresomebanksreachingouttobecomeone-stopfinancialserviceconglomerates?

Isthisagoodideainyouropinion?

Therearetworeasonsthatbanksareincreasinglybecomingone-stopfinancialserviceconglomerates.Thefirstreasonistheincreasedcompetitionfromothertypesoffinancialinstitutionsandtheerosionofbanks’traditionalserviceareas.ThesecondreasonistheFinancialServicesModernizationActwhichhasallowedbankstoexpandtheirroletobefullserviceproviders.

1-4.Whichbusinessesarebanking’sclosestandtoughestcompetitors?

Whatservicesdotheyofferthatcompetedirectlywithbanks’services?

Amongabank’sclosestcompetitorsaresavingsassociations,creditunions,moneymarketfunds,mutualfunds,hedgefunds,securitybrokersanddealers,investmentbanks,financecompanies,financialholdingcompanies,andlifeandproperty-casualtyinsurancecompanies.Allofthesefinancialserviceprovidersareconvergingandembracingeachother’sinnovations.TheFinancialServicesModernizationActhasallowedmanyofthesefinancialserviceproviderstoofferthepublicone-stopshoppingforfinancialservices.

1-5.Whatishappeningtobanking’sshareofthefinancialmarketplaceandwhy?

Whatkindofbankingandfinancialsystemdoyouforeseeforthefutureifpresenttrendscontinue?

TheFinancialServicesModernizationActof1999allowedmanyofthebanks’closestcompetitorstoofferawidearrayoffinancialservicestherebytakingawaymarketsharefrom“traditional”banks.Banksandtheirclosestcompetitorsareconvergingintoone-stopshoppingforfinancialservicesandthistrendshouldcontinueinthefuture

1-6.Whatdifferentkindsofservicesdobanksofferthepublictoday?

Whatservicesdotheirclosestcompetitorsoffer?

Banksofferthewidestrangeofservicesofanyfinancialinstitution.Theyofferthriftdepositstoencouragesavingandcheckable（demand）depositstoprovideameansofpaymentforpurchasesofgoodsandservices.Theyalsoprovidecreditthroughdirectloans,bydiscountingthenotesthatbusinesscustomershold,andbyissuingcreditguarantees.Additionally,theymakeloanstoconsumersforpurchasesofdurablegoods,suchasautomobiles,andforhomeimprovements,etc.Banksalsomanagethepropertyofcustomersundertrustagreementsandmanagethecashpositionsoftheirbusinesscustomers.Theypurchaseandleaseequipmenttocustomersasanalternativetodirectloans.Manybanksalsoassisttheircustomerswithbuyingandsellingsecuritiesthroughdiscountbrokeragesubsidiaries,theacquisitionandsaleofforeigncurrencies,thesupplyingofventurecapitaltostartnewbusinesses,andthepurchaseofannuitiestosupplyfuturefundingatretirementorforotherlong-termprojectssuchassupportingacollegeeducation.Alloftheseservicesarealsoofferedbytheirclosestcompetitors.Banksandtheirclosestcompetitorsareconvergingandbecomingthefinancialdepartmentstoresofthemodernera.

1-7.Whatisafinancialdepartmentstore?

Auniversalbank?

Whydoyouthinktheseinstitutionshavebecomesoimportantinthemodernfinancialsystem?

Financialdepartmentstoreanduniversalbankrefertothesameconcept.Afinancialdepartmentstoreisaninstitutionwherebanking,fiduciary,insurance,andsecuritybrokerageservicesareunifiedunderoneroof.Abankthatoffersalltheseservicesisnormallyreferredtoasauniversalbank.Thesehavebecomeimportantbecauseofconvergenceandchangesinregulationsthathaveallowedfinancialserviceproviderstoofferallservicesunderoneroof

1-8.Whydobanksandotherfinancialintermediariesexistinmodernsociety,accordingtothetheoryoffinance?

Therearemultipleapproachestoansweringthisquestion.Thetraditionalviewofbanksasfinancialintermediariesseesthemassimultaneouslyfulfillingthefinancial-serviceneedsofsavers（surplus-spendingunits）andborrowers（deficit-spendingunits）,providingbothasupplyofcreditandasupplyofliquidassets.Anewerviewseesbanksasdelegatedmonitorswhoassessandevaluateborrowersonbehalfoftheirdepositorsandearnfeesforsupplyingmonitoringservices.Banksalsohavebeenviewedinrecenttheoryassuppliersofliquidityandtransactionsservicesthatreducecostsfortheircustomersand,throughdiversification,reducerisk.Banksarealsocriticalinthepaymentsystemforgoodsandservicesandhaveplayedanincreasinglyimportantroleasaguarantorandariskmanagementroleforcustomers.

1-9.Howhavebankingandthefinancialservicesmarketchangedinrecentyears?

Whatpowerfulforcesareshapingfinancialmarketsandinstitutionstoday?

Whichoftheseforcesdoyouthinkwillcontinueintothefuture?

Bankingisbecomingamorevolatileindustrydue,inpart,toderegulationwhichhasopenedupindividualbankstothefullforceofthefinancialmarketplace.Atthesametimethenumberandvarietyofbankingserviceshasincreasedgreatlyduetothepressureofintensifyingcompetitionfromnonbankfinancial-serviceprovidersandchangingpublicdemandformoreconvenientlyandreliablyprovidedservices.Addingtotheintensityofcompetition,foreignbankshaveenjoyedsuccessintheireffortstoentercountriesoverseasandattractawayprofitabledomesticbusinessandhouseholdaccounts.

1-10.Canyouexplainwhymanyoftheforcesyounamedintheanswertothepreviousquestionhaveledtosignificantproblemsforthemanagementofbanksandotherfinancialfirmsandtheirstockholders?

Thenetresultofrecentchangesinbankingandthefinancialservicesmarkethasbeentoputgreaterpressureupontheirearnings,resultinginmorevolatilereturnstostockholdersandanincreasedbankfailurerates.Someexpertsseebanks'roleandmarketshareshrinkingduetorestrictivegovernmentregulationsandintensifyingcompetition.Institutionshavealsobecomemoreinnovativeintheirserviceofferingsandinfindingnewsourcesoffunding,suchasoff-balance-sheettransactions.Theincreasedriskfacedbyinstitutionstoday,therefore,hasforcedmanagerstomoreaggressivelyutilizeawidearrayoftoolsandtechniquestoimproveandstabilizetheirearningsstreamsandmanagethevariousriskstheyface.

1-11.Whatdoyouthinkthefinancialservicesindustrywilllooklike2