...Is it necessary to combine Investment Banking and Commercial Banking? Separation of Retail Banking and Investment Banking was a hot topic with President Obama’s proposal in January 2010 regarding a ban on US Banks on retail banks from using their own funds in investments and limiting to invest their customer’s funds. This news made many to wonder whether the world is going back to replace Glass Steagall Act which was abolished in 1999.(BBC,21January2010) Glass-Steagall Act(GSA)commonly known as Banking Act 1933 made the investment banks and Commercial Banks to function separately in order to refrain Commercial Banks from greater in securities business activities. This Act prohibited Commercial Banks to underwrite securities to public while it prohibited Investment Banks to accept deposits from customers. (Investopedia,2003). Many argue that commercial banks should not involve in securities(stock/bond)market investments as commercial banks divert funds in investment banking. In other words internal transparency of movements of funds not very clear when operating as a ‘Universal Bank’. Prior to 2007-2009 financial crisis Commercial Banks were greedily involved merely because of profits in securitization business where subprime mortgages were involved. During the rise in property market in 2006,banks created and traded in securitized assets, backed by subprime mortgages. Banks became greedy of making more money through SPV(Special Purpose Vehicle)taking high risks. When...
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...manage its credit risk is to adhere to stricter lending guidelines by only extending loans to those in a better financial situation. Credit insurance and credit derivatives “allow users to manage their exposure to credit risk. Credit derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private investors or governments) (2)”. 3. “Optimum liquidity is achieved by balancing risks and returns. To be more specific, measures of liquidity need to be high enough to meet even unexpected changes in liquidity needs and sources (p.329).” A bank’s concern of having liquidity or the ability to convert an asset without a decrease in the price is important in the banking industry. In order to achieve such liquidity there are several things that can be evaluated such as: • The available assets easily convertible into cash. • The volatility of deposits. • The reliance of money market instruments and...
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...Brand Name: "Lucent" stands for glowing with light. The connect we are trying to create with the brand name here is that one can have glowing skin sans acne by using our acne strips. The conventional methods for removing acne are face washes and creams that often leave after-marks post their use. We not only ensure effective and painless acne removal but also lucent skin after the use. Brand Logo: Lucent Lucent The brand logo is a simple oval with the name "Lucent" written in a cursive font. The background is white to give a picture of illumination or brightness. The font is cursive to give it a personal touch and warm appeal. Brand Colours: Green and white have been identified as the colours to do the branding. These colours have been chosen as they are neutral colours and "Lucent" also stands for a Unisex brand. Further, "green" stands for being eco-friendly and is synonymous with Lucent's properties too. Lucent is an eco-friendly product as it makes use of organic and herbal ingredients and is biodegradable after use. The colour "white" symbolises purity and radiance which is how the skin feels after use. Brand Tagline: The tagline for Lucent has been given as "Perfect & You". This is mainly used to denote how a person feels after using Lucent. The idea of using the word "perfect" is that it makes the skin flawless and without any imperfections. Brand Vitality: The product is a One-time solution for removing acne from roots. It is so effective that a...
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...Introduction The aim of this report is to create an awareness of the interest rate which impacts the company. Moreover, the bank recommendations are evaluated whereby interest rate risk is exposed to the bank. There is a recommendation of a rate cut on loans by the bank board along with the growth of loan revenue and thus profit. We have also discussed the strategy to cover any decline in net worth using futures. Our bank, Make Life Easier (MLE) Bank involving the members with their respective ID which are Kok Yee Won (3889479), Lee Choi Yoong (3889459), Ng Mun Yi (3889480) and Sia Cui Lin (3889481). Interest Rates Bank profit is influenced by the changes in interest rates When interest rate rises, bank portfolio managers can expect changes on both asset and liability sides of their balance sheets (Flannery 1980). Bank revenues and costs will adjust to reflect the new level of interest rates at different speeds, depending on each bank’s collection of assets and liabilities (Flannery 1980). The asset side, an increase in interest rates may increase the amount of income a bank may earn on new assts it acquires (Flannery 1980). Assets were liquidated and mature over time with the proceeds of gradually being reinvested at the new higher interest rates (Flannery 1980). Many bank loans were carrying an interest rate that can change before the loan mature such as business loans (Flannery 1980). Whereas in the liability side, the impact of the interest rate changes on bank...
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...Risks Affecting Commercial Banks:- Commercial banks considered as one of the main financial intermediaries in the market, therefore the factors that occurred a negative results on the commercial banks has a strongly affect upon the economic condition and securities markets as well, the risks factors that are affecting the commercial banks can be as the following :- Risks of Interest Rates:- The risk factor that's the most widespread is interest rate for the commercial banks, but commercial banks are proficient at reducing the risk of interest rates by hedging their loans against any kind of variations in the curve of interest rates in economy. To clarify the image more better to give a simple example on this, assume that one bank is making a business loans and the borrower is charged by 5%, keep in mind the current interest rate level is at 2%, so 3% is the amount of profit that the bank can achieve just in case that the interest rate level remains the same at 2% during the life-time of the loan, yet if the general interest rate level has increased up to 3% then the profit will be reduced to 2%. Although the interest rates are outside the field of commercial bank's processes, but they are required to avoid it , because it applies a risks upon the commercial banks. Risks of Default:- Generally Commercial banks are depending on loans in making money. Default borrower can be defined as people who are taking loans from the bank but they doesn't have the ability to pay...
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... where people secure their money and use this institution as a source of possible finance. Banking in the form in which it exists nowadays is comparatively of recent origin. Before the advent of modern banking, direct finance, where the owner of capital deals directly with the user of capital, was the customary mode of transference of funds from savers to investors. Now, banks are engaged in various functions i.e., receiving, collecting, transferring, paying, lending, investing, dealing, exchanging, and servicing money and claims to money both locally and internationally. Bangladesh is a country suffering from immense social, political, economic and environmental issues and these issues need to be addressed for the overall development of this country. However, we all know that the people of the whole world are concerned about the environmental degradation, especially the rising of global temperature and thereby melting of glaciers and ice-berg in the polar region and consequently rising of sea level, which will directly affect the low lying countries of the world like Bangladesh. The world conscious people are also concerned about the increase of Green House Gases and Chlorofluorocarbons (CFCs) and thereby depletion of Ozone layer. As such, every person and especially the professionals must have greater role to check the environmental degradation. The contribution of the banking sector is playing significant role to save the environment...
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...A REPORT ON DEPOSITORY INSTITUTIONS: COMMERCIAL BANKING INDUSTRY OF BANGLADESH Date of submission: 24th August 2015 Submitted to Farzana Lalarukh Associate Professor Department of Finance University of Dhaka Submitted by SL Name BBA ID Remarks 1 Sifat sadia 17-003 2 Barna Paul 17-047 3 Maghla Hossain 17-061 4 Saima Sultana 17-069 5 Nawsina Arif 17-085 Department of Finance University of Dhaka Date of Submission: 24th August, 2015 Department of Finance University of Dhaka Letter of Transmittal August 24, 2015 Farzana Lalarukh Associate Professor Department of Finance University of Dhaka Subject: Submission of Report on depository institutions: banking industry of Bangladesh. Dear Madam, It gives us enormous pleasure to submit the report on Depository institutions of Bangladesh as per the Advisor’s instruction. We expect this report to be informative as well as comprehensive as per requirement. Working with such a topic was an inspiring experience for us. We believe that the knowledge and the experience we gathered will facilitate us a lot in our future career life. With our limited knowledge, we have tried our level best to prepare the report worthwhile. Your acceptance and appreciation would surely inspire us. For any further explanations about the report, we will be gladly available to clarify the ins and outs. Sincerely, Sifat Sadia Roll no. 17-003 On behalf of Group...
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...math on Thursday • This math will be the math for Test 4 Cash Conversion Cycle -From investopedia.com (3 definitions) • A metric that expresses the length of time, in days, that takes for a company to convert resource inputs into cash flows • The cash conversion cycle attempts to measure the amount of time each net input dollar is tied up in the production and sales process before it is converted into cash through sales to customers. • This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties. -Commercial and industrial loans represent the earliest form of lending that banks varied out in their more than 2000 years of history -close to 1/5 of commercial bank loans loan portfolio is classified as business or C&I loan Short-Term Business Loans • Self-Liquidating Inventory Loans- business loans, usually to support the purchase of inventories, in which the credit is gradually repaid by the borrowing customer as inventory is sold (60-90 days). o Usually related to the borrowers need for short term cash to finance purchases of inventory or cover production costs, the payment of taxes, interest payments on debt, and dividend payments to stock holders. • Working Capital Loans- loans that provide business with short-term credit lasting from a few days to one year and that re often used to fund the purchase...
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...Reserve Bank of New York. The requests looked real: They appeared to come from a Bangladesh server, and the thieves supplied the correct bank codes to authenticate the transfers. Most of the stolen funds ended up in accounts located in the Philippines, while roughly $20 million, which has since been recovered, went to Sri Lanka. The robbers tried to steal $850 million more, but the requests were denied by the New York Fed. The stolen funds that ended up in the Philippines were discovered last March 9, after Rizal Commercial Banking Corporation (RCBC) said that a bulk of the laundered money was deposited in its Jupiter branch in Makati City. It was approximately $81 million, which is suspected to have come from the same source, managed to enter the local banking system but was released to local RCBC clients with an alleged help of the bank’s Jupiter branch manager. A number of big names are said to be involved who are mainly from 3 camps: Rizal Commercial Banking Corporation (RCBC), PhilRem Service Corporation, and the circle of casino junket operators. Based on multiple investigations, here is a timeline summary about how the allegedly involved people operated the said money laundering scandal here in the Philippines. (Sources: inquirer.net and rappler.com) May 15, 2015. Enrico Teodoro Vasquez, Alfred Santos Vergara, Michael Francisco Cruz and Jessie Christopher Lagrosas open US dollar bank accounts in...
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...Forces of the Philippines Mutual Benefit Asso., Inc. (AFP-MBAI), is a corporation duly organized primarily to perform welfare services for the Armed Forces of the Philippines. Reyes petitioned two resolutions. On the resolution dated January 23, 1992 for the complaint against Graciela Eleazar in which both parties entered into a contract of loan being Reyes as the creditor and Eleazar as the debtor with no collateral but with a higher interest amounting to P216.053,126.80 for the construction of Condominium and Gold Business Park of Eleazar. In return, Eleazar issued 21 postdated checks to cover payments of the loan packages. However, when those checks were presented for payment, the same were dishonored by the drawee bank, Rizal Commercial Banking Corporation (RCBC), due to stop payment order made by Graciela Eleazar. Despite Eurotrust's notices and repeated demands to pay, Eleazar failed to make good the dishonored checks, prompting Reyes to file against her several criminal complaints for violation of B.P. 22 and estafa under Article 315, 4th paragraph, No. 2 (d) of the Revised Penal Code. Meanwhile, respondent AFP-MBAI which invested its funds with Eurotrust, by buying from it government securities, conducted its own investigation and found that after Eurotrust delivered...
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...Bangladesh, 160 million peoples country is encompasses with thousands of Industries where service sector have taken the leading position in the country’s GDP in recent years. Banking sector is holding the leading position in order to take the GDP’s leader board of the table among the service industries. Last year Banking sector have contributed 48% of the country’s total GDP which is the clear indicator of pick position holder of the table. That rapid growth of the Banking service industry influenced a lot of people to involve their career in multiple sector of banking industry directly. So this is the perfect beginning t report the modern banking service in Bangladesh by South East Bank Limited where I have witnesses their performance growth in banking sector as an intern. Banking plays an important role in the economy of any country. In Bangladesh Muslim consist more than 80% of its population. These people possess strong faith on Allah and they want to lead their lives as per the construction given in the holy Quran and the way shown by the prophet Hazrat Mohammad (sm).But on Islamic banking system was developed here up to 1983.The traditional banking is fully based on interest it is commonly meant as commercial banks. But interest is absolutely prohibited by Islam. The main aim of traditional banking is to earn profit by borrowing and lending money in exchange of interest. As a result there is an unfair competition among the bankers and among the customers. The major objective...
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... In Canada recession was less severe and they face no banking failure due to the size and diversification in their large institution has maintained their stability. New Entrant was limited by Canadian government and I exchange chartered bank with provide them financial stability, in Canada focuses on banking sector that’s why brokers dealers and security market remain much at smaller .The banking system of branch was oliogiopolisty that imply the system which has limited supply of banking services and cost as compared to their competitors . In our previous work (Bordo et al., 1994) we analyzed that the Canadian banking is not categorized in higher cost as compared to US. The banking of Canada same returns on equity and largely used MMMFSs After 1987 they became a vital part of Canada banking, at that time government had given them permission to create MMMFs and half of total MMMFs are kept at bank which means that they are within the banking system. According to (Byung kyong & Niamh Sheridan,2012) Canada’s three large bank weighted average is two an half time smaller than Australia’s four major banks however non performing rate of housing loans in Australia and Canada are almost same in recent years. The mortgages in Canada are provided by Canada mortgage and Housing Corporation own by Government are assigned at weight of zero risk, therefore the lowest risk of residential mortgages of four large Canadian banking is almost 70% in comparison with 40% of major Australian...
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...OFFICE USE ONLY AFF/AFW2401 Replacement Paper 24.5.07 Page 1 of 18 Monash University Semester One Examination 2007 Faculty of Business and Economics Department of Accounting and Finance EXAM CODES: AFF/AFW2401 TITLE OF PAPER: COMMERCIAL BANKING AND FINANCE EXAM DURATION: 3 hours READING TIME: 10 minutes THIS PAPER IS FOR STUDENTS STUDYING AT: (office use only - tick where applicable) Berwick Clayton Peninsula Distance Education Open Learning Caulfield Gippsland Sunway Hong Kong Other (specify) During an exam, you must not have in your possession, a book, notes, paper, calculator, pencil case, mobile phone or any other material/item which has not been authorised for the exam or specifically permitted as noted below. Any material or item on your desk, chair or person will be deemed to be in your possession. You are reminded that possession of unauthorised materials in an exam is a disciplinable offence under Monash Statute 4.1. AUTHORISED MATERIALS CALCULATORS YES NO (Permitted calculators: Citizen SRT-135, Casio FX82MS scientific calculator, the Casio FX82AU scientific calculator, and Sharp EL-735 financial calculator, or calculators with an 'approved for use' Faculty label) OPEN BOOK YES NO SPECIFICALLY PERMITTED ITEMS YES NO if yes, items permitted are: This paper consists of six (6) questions and one (1) formula sheet printed on a total of eighteen (18) pages. Answer Question 1 in the scriptbook provided. Answer all other questions in the...
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...Cumulative Bank Services and Balance In the world of banking, it is often speculated that the more accounts and services a client holds with a particular financial institution, the longer they will stay with that bank. The idea is, the more accounts they open for each client, the more dependent these clients will become to their services, and closing several accounts to join another institution requires time and effort. Avoiding these tedious tasks will manipulate a client to stay with the given financial institution longer as well as prompting them to maintain majority of their funds under the same roof. There are many studies conducted to prove this scenario that is the reason why the “cross-selling” technique has been adopted by the banking industries. The ultimate goal is clear, and all financial institutions believe that “those who die with the most money win”. Whether or not these techniques create a false sense of loyalty, the question is: Does account balance exhibit any correlation to the number of services a client holds with the bank? Numbers don’t lie, we will explore and evaluate this hypothesis using statistics and data sets from Century National Bank to prove whether or not this idea holds true. Hypothesis Statement “Does account balance exhibit any correlation to the number of services a client holds with the bank?" The banking industry as a whole has changed over the past decade in which customer are able to use technology to update account information, view...
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...granted) will be corrected but this mark will not be included for grading purposes. Prime Bank of Massachusetts Prime Bank of Massachusetts was started in 1964 with James Rogers as CEO, who is now chairman of the board. Prime Bank had been growing steadily since its beginning and has developed a loyal customer following. Today there are 45 bank locations throughout Massachusetts, with corporate headquarters in Newbury, Massachusetts. The bank offers a wide array of banking services to commercial and noncommercial customers. Prime Bank has considered itself to be a conservative, yet innovative, organization. Its locations are open Monday–Friday 9–4and Saturday 9–12. Most of the facilities are located adjacent to well-established shopping centres, with multiple ATM machines and at least three drive-through windows. However, Prime Bank’s growth has brought on certain problems. Having the right amount of tellers available in the bank as well as in the drive-through window has been a challenge. Some commercial customers had recently expressed...
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