Study sets matching "commercial banking"

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Study sets matching "commercial banking"

19 terms
Commercial Banking
A=L+O/E for Banks
Gordon Growth Model
ROE
ROA
Cash+Securities+Loans+Misc. Assets = Deposits+Non-Deposit bor…
Dividend/ (Discount Rate(R) - Expected Growth (G))
Net Income/ Total Equity
Net Income/ Total Assets
A=L+O/E for Banks
Cash+Securities+Loans+Misc. Assets = Deposits+Non-Deposit bor…
Gordon Growth Model
Dividend/ (Discount Rate(R) - Expected Growth (G))
Commercial Banking
transfer
current account
standing orders/direct debits
overdraft
paid directly into their bank account
usually pays little or no interest
ways of paying regular bills at regular intervals
découvert
transfer
paid directly into their bank account
current account
usually pays little or no interest
39 terms
Commercial Banking
Definition of a Bank
According to Cairns Cross
Primary functions of a bank
2B) Cash Credit
A bank is an institution where those with idle cash make depo…
A bank is an institution which deals with money and credit
There are 2 main functions. Accepting Deposits and giving loa…
A person can borrow money against eligible securities. Intere…
Definition of a Bank
A bank is an institution where those with idle cash make depo…
According to Cairns Cross
A bank is an institution which deals with money and credit
58 terms
Commercial Banking
Income Statement
Balance Sheet
ROE
ROA
provides information over a period of time
provides information at a point in time
a measure of the return that shareholders receive on each dol…
measures the ability of the bank's assets to generate profit;…
Income Statement
provides information over a period of time
Balance Sheet
provides information at a point in time
138 terms
Commercial Banking
Fee Income
Underwriting
Sources
Trust Services
Noninterest source of revenue for a financial firm that arise…
Security _________: the purchase for resale of new stocks, bo…
_______ of Fee Income: Fees on deposits, fiduciary services (…
Management of property and other valuables owned by a custome…
Fee Income
Noninterest source of revenue for a financial firm that arise…
Underwriting
Security _________: the purchase for resale of new stocks, bo…
Commercial Banking
Principal reason many financial firms…
types of loans
Category in dollar value
Factors determining mix/growth of loans
to make loans
real estate, financial institutional (start new bank), ag, co…
real estate, loans to individuals, and commercial and industr…
characteristics of market area... lender size (more capital, loa…
Principal reason many financial firms…
to make loans
types of loans
real estate, financial institutional (start new bank), ag, co…
commercial banking
organizational forms
board of directors
stockholders
unit bank
to perform these various roles and to supply the services the…
the committee
owners
offer their service from one office such as drive up and atms…
organizational forms
to perform these various roles and to supply the services the…
board of directors
the committee
Commercial banking
Commercial or retail banks
Current (checking) accounts
Deposit (saving) accounts
Loan
Businesses that trade in money
They don't pay interest and allow its holder to withdraw cash…
They pay interest but require notice in advance to withdraw
It is a fixed sum of money lent for a fix period on which the…
Commercial or retail banks
Businesses that trade in money
Current (checking) accounts
They don't pay interest and allow its holder to withdraw cash…
18 terms
Commercial Banking
Accelerated Depreciation
Account Activity
Account executive
Account Analysis
A method of computing depreciation deductions for income taxe…
Transactions associated with a deposit account, including hom…
A representative of a brokerage firm who processes orders to…
An analytical procedure for determining whether a customer's…
Accelerated Depreciation
A method of computing depreciation deductions for income taxe…
Account Activity
Transactions associated with a deposit account, including hom…
Commercial Banking
Primary Roles in Commercial Banks
Current Trends Affecting Banks
Reasons for the Regulations of Banks
Banking System is Inherently Unstable
Intermediation Role, Safekeeping, Information Gathering and M…
Reaction to the Financial Crisis, Continued Effects from Indu…
Promote financial stability and protect the public's savings,…
Solution: federal deposit insurance
Primary Roles in Commercial Banks
Intermediation Role, Safekeeping, Information Gathering and M…
Current Trends Affecting Banks
Reaction to the Financial Crisis, Continued Effects from Indu…
12 terms
Commercial Banking
Loan/Assets
NIM
ROA
ROE
60%
3.5%^
1%^
12-15%^
Loan/Assets
60%
NIM
3.5%^
19 terms
Commercial Banking
A=L+O/E for Banks
Gordon Growth Model
ROE
ROA
Cash+Securities+Loans+Misc. Assets = Deposits+Non-Deposit bor…
Dividend/ (Discount Rate(R) - Expected Growth (G))
Net Income/ Total Equity
Net Income/ Total Assets
A=L+O/E for Banks
Cash+Securities+Loans+Misc. Assets = Deposits+Non-Deposit bor…
Gordon Growth Model
Dividend/ (Discount Rate(R) - Expected Growth (G))
53 terms
Commercial Banking
ROA
ROE
Net Interest Margin
Fair evaluation of a financial firm's…
Primarily an indicator of Managerial efficiency , indicates h…
Measure of the rate of return flowing to shareholders. Formul…
measures how large a spread between and interest revenues and…
evaluate whether they have reached the objective set by manag…
ROA
Primarily an indicator of Managerial efficiency , indicates h…
ROE
Measure of the rate of return flowing to shareholders. Formul…
37 terms
Commercial Banking
Banks which function through a federal…
For the purposes of our class, a bank…
Who is the sole regulator for financia…
Over the last 10+ years in the US fina…
...
deposits/loans
Federal Reserve
decreased/increased
Banks which function through a federal…
...
For the purposes of our class, a bank…
deposits/loans
Commercial Banking
A financial firm that is smaller in si…
A larger financial firm that is an ind…
A financial firm that specializes in s…
A financial firm that collects deposit…
community bank
Money Center Bank
Savings and Loan Association
Savings and Loan Association
A financial firm that is smaller in si…
community bank
A larger financial firm that is an ind…
Money Center Bank
Commercial Banking
What does Camels stand for?
What are the 6 risks involved with a b…
Market risk:
What is a ration that resembles market…
Capital, assets, management, earnings, liquidity, and rate se…
Market, credit, reputation, operational, legal, and liquidity
Is the current and potential risk to earnings because of chan…
Net position (gap) 1 year/TA
What does Camels stand for?
Capital, assets, management, earnings, liquidity, and rate se…
What are the 6 risks involved with a b…
Market, credit, reputation, operational, legal, and liquidity
33 terms
Commercial banking
Trade in money
Deposit account
Direct debit
To require
Handel pieniędzmi
Rachunek depozytowy, lokata
Polecenie zapłaty
Wymagać
Trade in money
Handel pieniędzmi
Deposit account
Rachunek depozytowy, lokata
Commercial Banking
bank account
current/checking account
to lend
overdraft
konto bankowe
rachunek bieżący
pożyczać
debet, przekroczenie stanu konta
bank account
konto bankowe
current/checking account
rachunek bieżący
Commercial banking
Types of loans
Factors that determine growth
Community reinvestment act
Equal credit opportunity act
Real estate, financial institution, agriculture loans, commer…
Lender size (wholesale or retail), expertise of management, e…
Vendors must make affirmative effort to meet the credit of in…
No individual can be denied credit because of their race sex…
Types of loans
Real estate, financial institution, agriculture loans, commer…
Factors that determine growth
Lender size (wholesale or retail), expertise of management, e…
8 terms
Commercial banks
Lodgement
Night safe
Commercial bank
Bank overdraft
Put money into your savings or current account
A metal drawer located in the wall of most bank branches
A business that provides financial services to personal and b…
Permission from your bank to spend more money than you have i…
Lodgement
Put money into your savings or current account
Night safe
A metal drawer located in the wall of most bank branches
5 terms
Commercial banks
Name 4 commercial banks
DIRT
3 Advantages of savings account
ATM
Aib, Bank of Ireland, Permanent tsb, Ulster bank
deposit Interest Retention Tax
Convenient way of saving money... Receive interest each year on…
Automated Teller Machine
Name 4 commercial banks
Aib, Bank of Ireland, Permanent tsb, Ulster bank
DIRT
deposit Interest Retention Tax
11 terms
Commercial Banks
Definiton of a commercial bank:
Bank Services:
Current accounf
Deposit/Savings Account
'High-street' banks like Barclay's, Natwest, Nationwide etc.
Keeping money safe... Lending money - to individuals and compani…
Main account where your pay goes in and you do your regular,…
Save up money for a longer period of time. Can earn higher in…
Definiton of a commercial bank:
'High-street' banks like Barclay's, Natwest, Nationwide etc.
Bank Services:
Keeping money safe... Lending money - to individuals and compani…
commercial bank
a) Foreign currency's interest rate; a…
b) High; high
d) Does not; could
a) Locally
). When a U.S. firm borrows a foreign currency and has no off…
). If a firm repeatedly borrows a portfolio of foreign curren…
Assume the annual British interest rate is above the annual U…
A risk-averse firm would prefer to borrow _______ when the ex…
a) Foreign currency's interest rate; a…
). When a U.S. firm borrows a foreign currency and has no off…
b) High; high
). If a firm repeatedly borrows a portfolio of foreign curren…
23 terms
Commercial Banking
commercial banks
bank account
wages
monthly salary
banks which receive and hold deposits, pay money, and lend mo…
konto bankowe
płaca, zarobki
płaca miesięczna
commercial banks
banks which receive and hold deposits, pay money, and lend mo…
bank account
konto bankowe
20 terms
Commercial Banking
account
current account
lend
overdraft
Konto
Girokonto
leihen
Kontoüberziehung
account
Konto
current account
Girokonto
Commercial banking
direct debit
spread
borrower
lender
polecenie zapłaty
rozpiętość, różnica
pożyczkobiorca
pożyczkodawca
direct debit
polecenie zapłaty
spread
rozpiętość, różnica
90 terms
Commercial Banking Ch 5
Fed funds purchased is an example of _…
The short term securities of the bank,…
__________________________ is a noncas…
__________________________ is the diff…
nondeposit borrowings
secondary reserves
Provision for loan losses
Net interest income
Fed funds purchased is an example of _…
nondeposit borrowings
The short term securities of the bank,…
secondary reserves
82 terms
Commercial Banking Ch 3
A(n) ___________________ is a machine…
A(n) _____________________ is a bank w…
A(n) _____________________ is a bank w…
A(n)________________________ is a corp…
POS
Branch bank
Unit bank
Bank holding company
A(n) ___________________ is a machine…
POS
A(n) _____________________ is a bank w…
Branch bank
Commercial Banking Fin4324
Internally Generated Funds Equate to _…
Externally Generated Funds Equate to__…
Sources of External Funds____%, ____%,…
Bank Revenue Derives from:
70%
30%
New Loan (69%) Bonds (29%) Equity (2%)
Interest from Loans (70%), Security investments, Fees
Internally Generated Funds Equate to _…
70%
Externally Generated Funds Equate to__…
30%
49 terms
Ch 16 Commercial Banking
Regulators generally prohibit bank fro…
Which of the following classes of secu…
Which of the following classes of secu…
For which of the following classes of…
Common Stock
Held to maturity
b and c only
Available for sale
Regulators generally prohibit bank fro…
Common Stock
Which of the following classes of secu…
Held to maturity
86 terms
Commercial Banking Chapter 2
The _____________________ was created…
The________________________ is the law…
One tool that the Federal Reserve uses…
The__________________________ was crea…
FDIC
Bank Merger Act
Open market operations
Federal Reserve
The _____________________ was created…
FDIC
The________________________ is the law…
Bank Merger Act
25 terms
Commercial Banks
Major Assets
Major Liabilities
Services Provided
Other Assets
Loans, commercial and industrial loans are declining because…
federally insured deposits—thus, they are considered deposito…
play a key role in the transmission of monetary policy.... provi…
Investment securities- generate revenue and provide banks wit…
Major Assets
Loans, commercial and industrial loans are declining because…
Major Liabilities
federally insured deposits—thus, they are considered deposito…
34 terms
Ch 13 Commercial Banking
A
B
A
D
1. The largest single loan category for all banks is:... a. real…
2. Banks that emphasize lending to individuals are labeled:... a…
3. Banks that emphasize lending to commercial customers are l…
4. The vast majority of FDIC-insured institutions are classif…
A
1. The largest single loan category for all banks is:... a. real…
B
2. Banks that emphasize lending to individuals are labeled:... a…
17 terms
Commercial Banking (Chap 7)
Asset Liability MGMT Strategies:... Asset…
Asset Liability MGMT Strategies: Liabi…
Asset Liability MGMT Strategies:... Fund…
What is the yield curve, and why is it…
Control over assets, no control over liabilities- managers di…
Control over liabilities by changing rates and other terms -…
Works with both strategies - pg 219... Banks carry out daily ALM…
Graphical picture of the relationship between yields and matu…
Asset Liability MGMT Strategies:... Asset…
Control over assets, no control over liabilities- managers di…
Asset Liability MGMT Strategies: Liabi…
Control over liabilities by changing rates and other terms -…
14 terms
Commercial Bank
Liabilities... Checkable Deposits
Liabilities... Non-transaction Deposits
Liabilities... Borrowing: funds from the…
Equities... Bank Capital - is the source…
Accounts that allow the owner(depositor) to write checks to t…
Primary source of bank liabilities (69%) and are the account…
-discount loans( From the Fed)... -fed funds ( from other banks)…
Retained earnings are accumulated from banking profits.
Liabilities... Checkable Deposits
Accounts that allow the owner(depositor) to write checks to t…
Liabilities... Non-transaction Deposits
Primary source of bank liabilities (69%) and are the account…
Commercial Banks
Current account
Uses of a current account
Opening current account requirements
After current account is set up theyre…
Account used for day to day banking. Non interest accounts
1 Receive income... 2 Store money safely ... 3 Pay for goods and se…
1 Completed application form ... 2 Proof of identity (passport,d…
1 Current account number... 2 Debit card ... 3 PIN
Current account
Account used for day to day banking. Non interest accounts
Uses of a current account
1 Receive income... 2 Store money safely ... 3 Pay for goods and se…
Commercial banks
Deposit account advantages
Opening deposit account
Current account advantages
Opening current account
Convenient ... Interest... Online banking ... Low risk... ATM
Application form... Proof of address & identity ... Make lodgement…
Cheques & laser (easy payment)... Standing order/ Direct debit/…
Application form... Credit assessment... Proof of identity & addres…
Deposit account advantages
Convenient ... Interest... Online banking ... Low risk... ATM
Opening deposit account
Application form... Proof of address & identity ... Make lodgement…
36 terms
Commercial Banking Chapter 1
Financial Services Modernization Act o…
Commercial bank
Money-center banks
Community banks
allows U.S banks to enter the securities and insurance and pe…
serves both business and household customers with deposits an…
Are industry leaders, spanning whole regions, nations, and co…
are usually much smaller and service local communities and to…
Financial Services Modernization Act o…
allows U.S banks to enter the securities and insurance and pe…
Commercial bank
serves both business and household customers with deposits an…
21 terms
Commercial Banking Vocab
Bank
Money-center banks
community banks
Bank definition for regulators
the financial intermediary that offers the widest range of fi…
largest commercial banks based in leading financial centers
smaller, locally focused commercial and savings banks
A bank is any business offering deposits subject to withdrawa…
Bank
the financial intermediary that offers the widest range of fi…
Money-center banks
largest commercial banks based in leading financial centers
35 terms
Ch 15 Commercial Banking
Which of the following had the greates…
Which of the following is an example o…
Which of the following is a disadvanta…
Which of the following contains a comp…
Credit card lenders
An automobile dealer negotiates the loan terms with the indiv…
The consumer loses float.
Smart Card
Which of the following had the greates…
Credit card lenders
Which of the following is an example o…
An automobile dealer negotiates the loan terms with the indiv…
15 terms
Commercial Banks
What done the term banking mean?
What is a commercial bank?
What does it mean by financial services?
Savings/Cashsave/Deposit Accounts
A financial institution.
It is a business that provides financial services to personal…
~Saving.... ~Making payments.... ~Transferring money.... ~Foreign exch…
An account used for saving money. Interest is paid on the mon…
What done the term banking mean?
A financial institution.
What is a commercial bank?
It is a business that provides financial services to personal…
14 terms
Personal banking (commercial banks)
Current account
Banker's card
Money laundering
Drawer
They are accounts to which people lodge money, which in the a…
It is a card presented by the drawer of a cheque that ensures…
It is the practice of hiding the source of money because it m…
It is the person who makes out and signs the cheque.
Current account
They are accounts to which people lodge money, which in the a…
Banker's card
It is a card presented by the drawer of a cheque that ensures…
27 terms
Commercial Banking and Central Banking
deposit
depositor
bank account
current account
wpłata
deponent
konto bankowe
rachunek bieżący
deposit
wpłata
depositor
deponent
34 terms
Ch. 14 Commercial Banking
E
B
A
C
1. Firms may need cash for all of the following except:... a. op…
2. All of the following would be generally be considered acce…
3. Which of the following is not one of the essential issues…
4. Short-term working capital loans are generally repaid with…
E
1. Firms may need cash for all of the following except:... a. op…
B
2. All of the following would be generally be considered acce…
94 terms
Commercial Banking Midterm
What is a bank?
3 key characteristics of a bank
Deregulation in banking has... (3)
The value of a bank's stock rises when…
they transfer funds from savers to borrowers (financial inter…
few fixed assets... short duration liabilities (many are payabl…
encouraged larger, riskier loan portfolios (greater loan loss…
expected dividends increase... the required return falls (risk…
What is a bank?
they transfer funds from savers to borrowers (financial inter…
3 key characteristics of a bank
few fixed assets... short duration liabilities (many are payabl…
Commercial or retail banking
account
branch
credit
current account
an ​arrangement with a ​bank to ​keep ​your ​money there and…
an ​arrangement with a ​bank to ​keep ​your ​money there and…
​money in ​your ​bank ​account:
a ​bank ​account that you can take ​money from at any ​time a…
account
an ​arrangement with a ​bank to ​keep ​your ​money there and…
branch
an ​arrangement with a ​bank to ​keep ​your ​money there and…
13 terms
Commercial Banking Vocab 1
National credit union administration (…
Securities Exchange Commission
State insurance commissions
Systematic risk
Supervise credit unions
Insure money market funds @ fixed price $1/share
prescribe the types of insurance policies, set market rates,…
risks related to the volatility of economic & financial condi…
National credit union administration (…
Supervise credit unions
Securities Exchange Commission
Insure money market funds @ fixed price $1/share
7 terms
Commercial Banking History
National banking act
Glass Steagall Act
Securities Exchange Act of 1934
1933 Banking Act
two United States federal banking acts that established a sys…
prohibited commercial banks from participating in the investm…
is a law governing the secondary trading of securities (stock…
was a statute enacted by the United States Congress that esta…
National banking act
two United States federal banking acts that established a sys…
Glass Steagall Act
prohibited commercial banks from participating in the investm…
Commercial Banking Final Exam
5 C's of Credit
In the 5 C's of credit what is character
In the 5 C's of credit what is capacity
In the 5 C's of credit what is collate…
1. Character ... 2.Capacity... 3.Collateral... 4.Conditions... 5.Captial
specific purpose of the loan and the seriousness of the borro…
legal authority to sign a binding contract and the sufficienc…
adequate assets to support the loan in the case of default -…
5 C's of Credit
1. Character ... 2.Capacity... 3.Collateral... 4.Conditions... 5.Captial
In the 5 C's of credit what is character
specific purpose of the loan and the seriousness of the borro…
9 terms
Commercial Banking Vocab 2
Bank assets
Bank Liabilities
Bank expenses
Problem with book value accounting
Cash and deposits in other institutions securities to provide…
Deposits, nondeposit borrowings, equity capital
interest paid on deposit, interest paid on NDB, salaries & wa…
historical cost accounting does not reflect the impact on a b…
Bank assets
Cash and deposits in other institutions securities to provide…
Bank Liabilities
Deposits, nondeposit borrowings, equity capital
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