Commercial Banking Test 1

Federal Reserve system
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Terms in this set (39)
Federal Reserve system
supervises and regularly examines all state chartered members and bank holding companies, acting as the "umbrella supervisor"
Comptroller of the Currencey
Issues charters for new national banks, supervises and regularly examines all national banks, approves bank applications
Securities and Exchange Commission
must approve public offerings of debt and equity securities by banking and thrift companies and oversee activities by banks
Federal Deposit Insurance Corporation
insures deposits of federally supervised banks conforming to its regulations
Commodities Futures trading commission
monitors the use of derivative instruments by financial firms exposed to significant risk
State Boards
supervise and regularly examine all state chartered banks and thrifts
National Currencey and bank acts (1863-64)
set up a new system for chartering new national banks through newly created bureau inside of the OCC
Federal Reserve act of 1913
helped stabilize the financial markets and economy. Created the federal reserve system
Glass-Steagall Act 1933
Created the FDIC to guarantee the public deposits up to a max amount of $250,000
FDIC improvement act 1991
Permitted the FDIC to borrow from treasury to remain solvent.
Consumer Credit protection act of TILARequired lenders to spell customers rights and responsibilities under a loan agreementDodd-Frank regulatory reform Billemphasized providing consumers with more understandable language to convey service prices and avoid misleading informationEqual credit opportunity actconsumers could not be denied a loan because of their age, sex, race, national origin, or religious affiliation, or welfare.Community Reinvestment actBanks cannot discriminate based on where a consumer livesRiegle-Neal interstate Banking Law 1994repealed McFadden act and provisions that prevented american banks from being full service interstate banks nationwideGramm-Leach Bliley act 1999overturned provisions of glass steagall act, allowing banking companies to affiliate with insurance and securities firms under common ownershipUSA patriot actestablish identity of customers opening new accounts, run customers ID's against national terrorist organizationsFed tools to affect monetary policylegal reserves of banking system, interest rates charged on loans made in financial system, relative currency values in the global and foreign exchange marketsFed influence behavior of legal reserves and interest rate and currency valuesopen market conditions, discount rate on loans to qualified financial institutions, legal reserve requirements on various bank liabilitiesOpen market policy toolprincipal tool of central bank monetary policy. Involves buying and selling U.S treasury billsSale of securities by the fed...decrease growth of deposits and loansPurchase of securities by fed..increases the growth of deposits and loansRetial banks"community banks" deal directly with the retail consumersRetail banks serviceschecking and savings accounts, mortgages, automobile financing, credit and debit cardswholesale bankingmeant to describe practice of lending and borrowing between two large institutions. "money center banks"wholesale banking servicescash management, equipment financing, large loans, merchant banking, trust servicesGovernment chartering scrutinythey hold the publics savings, failure can disrupt business activity, can create money through granting creditbenefits of federal charteradded prestige, federal assistance is of better quality, federal rules pre-empt state lawsbenefits of state chartereasier and less costly, bank doesn't have to join fed system, may offer services national banks do not, allow higher percentage of capital lended to a single personmultibank holding companiesa company that owns or controls two or more banks, controls more than 70% of total assets of all banking organizationsaffiliated banksbanks acquired by holding companiesfinancial holding companiesfinancial institution engaged in non-banking activities that offers customers a wide range of servicesreport of conditionbalance sheet account, shows the amount and composition of funds sources drawn upon to finance, lending, and investing activitiesfinancial outputsloans, securities, and other fundsfinancial inputsfund sources and their compositionsassets of balance sheetcash in vault, government and private interest, loans and lease financings, miscellaneous assetsliabilities categoriesdeposits made and owned, non-deposit borrowings of funds, equity capital that represents long term fundsreport of income (income statement)indicates the amount of revenue received and expenses incurred over a specific period of time.off balance sheet elementsunused commitments, standby credit agreements, derivative contracts, futures, options, and swaps