...spread by many channels, including prime brokerage, OTC derivatives positions, money market mutual funds, tri-party repo and wholesale funding markets. The cost to society of such failures is tremendous. One example is the increased tax burden on tax payers as a result of governments bailing out those banks. Views including the lack of proper regulation and the engagement in complex finance activities such as CDS have been blamed for the TBTF phenomenon. There have been a number of proposed solutions put forward to tackle the problem of TBTF whether on the regulatory side such as the separation of commercial and investment banking or on the disclosure side such as Basel 1,2 and 3 accords. By critically reviewing the arguments and evidence presented in the literature, this essay determines how effectively the solution of separating investment and commercial banking proposed by regulators of financial markets will deal with the problems of institutions which are TBTF. The financial crisis of 2008 has revealed unprecedented trading losses and problems of insolvency at the TBTF banks. In 2008 Lehman Brothers reported losses of more than $5 billion. Its share price plunged by almost half. This has made more than 1500 people redundant and has significantly badly affected the S&P and Dow Jones indexes. Major losses like this have induced economists...
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... Introduction Over the last years, there has been a debate on whether commercial and investment banks should be separated or not. Especially after the crisis in 2007 when taxpayers had to pay billion in the US to bail out the banks, the need for a “ring fence” around retail banking operations became urgent. Universal banks use the retail deposit for their investment operations which engage great risks. When their investments fail, the states have to rescue them. These mega banks emerged after the Great Depression when such a mergence became possible mainly because of the deregulation of western financial services. However, if global capital markets agree in a ring fence or total separation, it is a procedure that will take place over a period of years. In this project a brief review of the debate that takes place around this matter will be presented, mainly by stating some of the ideas that are commonly discussed. The Glass-Steagall Act and how we got here Recently President Obama proposed the separation of investment and retail banks, as it is believed that they were the main reason of the last financial crisis that started in 2007. Avgouleas (2010) points out that the mega banks were created after 1990’s due to the deregulation of the financial industry and they engaged great risk in their investment activities as the deposits (that were used for these purposes) were guaranteed by the government. Benston, G.J. (1994) points out that these mega banks became so large,...
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...definition of a bank. However, if you look at banks, you will see that they take many types of deposits and make many types of loans. In addition, if you are familiar with banks, you will notice that they act as intermediaries in many financial transactions. The banking is a vital function of the economy; without banks, the economy will not function properly. Why? The answer is that banks provide the link between savers and borrowers. In the US, people are net savers and businesses are net borrowers. Without banks and some other financial institutions, the borrowers, businesses, will not be able to raise finds by borrowing from people, the savers. This function takes many forms. We will look at some if these forms in this course and in other courses in the finance concentration in the MBA program. The Nature of Banking in the US See Chapter 1 in the Textbook With a population of 30 million, Canada has 11 banks; Britten has 4 or 5 banks to serve 60 million citizens. Other countries have similar ratio of banks to population; about 3 to 6 million to a bank. How many banks does the US have to serve 300 million in population? The US has about 7,500 banks; this number does not include other companies that provide banking...
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...FINANCIAL SERVICES Optimizing banking operating models From strategy to implementation September 2012 kpmg.com KPMG INTERNATIONAL Contents Executive summary The challenges facing the banking sector Regulations and regulators Economic environment Changing customers The march of technology 3 3 3 1 2 2 How will these changes affect the universal banking operating model? The end of universal banking Disintegration of the value chain Cost efficiency is key in developing new operating models New IT architectures are essential 6 6 5 4 4 What banks need to do Seizing this once-in-a-life-time transformation opportunity Developing an innovative operating model to overcome loss of scale and cost issues Implementing long-term sustainable cost reduction measures Implementing an iterative and collaborative approach to a complex, multi-faceted problem 10 11 9 8 8 Making it to the finish line 13 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Optimizing banking operating models | 1 Executive summary A s the world emerges from what has been described as the greatest crisis in the history of finance capitalism, banks must adapt to radical new regulations, technologies, customer expectations and economic environments. The current universal bank operating model is bordering...
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...------------------------------------------------- VISION to be the best bank for all our stakeholders. MISSION we aim to be a premier universal bank of international standing, committed to creating and providing the best possible value for our core constituents – clients, employees, shareholders, and the communities whom we serve. We shall exert all efforts to transform every opportunity to expand our sphere of business activities into instruments to help our constituents realize their own goals and aspirations. We shall strive to reach a highly diversified customer base through an extensive distribution network at the same time delivering a wide array of premium-value products and services with distinctive quality. We realize that our success depends on the quality of our people, the efficiency of our systems, and the strength of our organization. Hence, we shall continuously invest in our human resources to ensure a service force characterized by the highest standards of dignity, probity and professionalism. We shall constantly endeavor to be more responsive to dynamic market conditions, flexible in coping with customer needs, innovative in leading the competition, and united in pursuing common objectives. Our financial capability shall likewise be continually invigorated to maintain dynamism, growth and stability. Recognizing our responsibility to our shareholders, we shall exercise judicious management to consistently provide them with fair returns and...
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...(Cooper et al, 2005). Mission statements are also very important for organizations because they provide the purpose of the existence of that organization. Lastly, strategy statements are the logical steps on how the business is going to reach the vision statement and keep up to its mission statement. Statements A. BBVA Compass Bank experienced five bank acquisitions throughout the past five years and has evolved to ensure one stop service to their customers and promote additional opportunities for sales, by building rapport with current books of business. They are hoping to change the significance of banking by becoming a global universal bank to their customers. B. Mission Statement- BBVA is a global group that offers individual and corporate customers the most complete range of financial and non-financial products and services by being a universal bank (bbva.com). Vision Statement- BBVA, building a better future for people (bbva.com) Strategy Statement- BBVA is a financial services group that strives to grow stronger through improvements in efficiency, profitability and capital adequacy commensurate with competitive advantage (bbva.com). Statement Validation A. As the mission, vision, and strategy statement are to be used as tools to embrace the organization’s purpose, existence, and future development. As change agents tend to be a huge factor in all of these preceding statements, the vision statement will define the best...
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...METROPOLITAN BANK AND TRUST COMPANY * Business Profile * Metrobank is a leading financial conglomerate with diversified business portfolio including: investment banking, thrift banking, leasing and financing, bancassurance, and credit cards. * Offers full range banking services to large local and multinational corporations, middle market and SMEs, high net-worth individuals and retail segment. * Established in 1962 to provide financial services to the Filipino-Chinese community. * Solid track record spanning over 50 years; multi-awarded bank. * Investment grade credit rating. * Majority owned by the Ty Family whose major business interests include financial services, real estate development, power and manufacturing. History Founded in September 5, 1962, Metropolitan Bank & Trust Co. (Metrobank) has since become the premier universal bank and among the foremost financial institutions in the Philippines. It offers a full range of banking and other financial products and services, including corporate, commercial and consumer banking, as well as credit card, remittances, leasing, investment banking and trust banking. Metrobank currently spans a consolidated network of over 1,950 ATMs nationwide; over 860 domestic branches; and 31 foreign branches, subsidiaries, and representative offices. Metrobank was incorporated in Binondo, Manila by a group of Filipino businessmen principally to provide financial services...
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...ICB Independent Commission on Banking Final Report Recommendations September 2011 ICB Independent Commission on Banking Final Report Recommendations September 2011 Official versions of this document are printed on 100% recycled paper. When you have finished with it please recycle it again. If using an electronic version of the document, please consider the environment and only print the pages which you need and recycle them when you have finished. © Crown copyright 2011 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-governmentlicence/ or e-mail: psi@nationalarchives.gsi.gov.uk. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to: Independent Commission on Banking Victoria House Southampton Row London WC1B 4AD This document is also available from our website at http://bankingcommission.independent.gov.uk/ ISBN 978-1-845-32-829-0 Produced by the Domarn Group, London. Final Report Contents Contents ...................................................................................................................... 1 List of acronyms .........................................................................................
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...THE BARCLAYS BANK Barclays bank is one of the British multinational financial and banking service business companies that have its headquarters in London. In connection to that, there are various duties or roles that the above bank’s manager does in ensuring that the daily activities of the bank run smoothly. The Barclays Bank manager is regarded as being the heart of the banking services offered by this organization. Typically, his or her responsibility entails managing the customers’ finances as well as saving time. As the manager of the bank, his or her role will be the management of workers to the point of increasing the general sale of the financial products and services (Downes et al, 2008). Such a manager also has the task of attracting new clients to their business organization. He or she will also be required to understand all the financial product rules. In connection to that, there is variety of roles that the Barclays Bank manger does. First is the general monitoring of sales targets and budgets generating figures and financial reports. Second, is the extensive promoting of his or her bank in the local society and attending conferences and meetings. Third, is the handling of their clients complaints and coming up with the rationale of solving them. In addition to that he has the responsibility of supervising the staff members and training, assessing any form of lending risk the bank might experience and motivating the bank’s staff to meet their targets (Duquenoy...
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...The Early Years The Philippine National Bank was established as a government-owned banking institution on July 22, 1916 with headquarters in the old Masonic Temple along Escolta, Manila. Its primary mandate was to provide financial services to Philippine industry and agriculture and support the government's economic development effort. World War I, then raging in Europe, generated huge demand for the country's major exports namely: sugar, copra, coconut oil, Manila hemp and tobacco. However, not much was being done to develop the industries that produced these sought-after crops since access to credit facilities was limited then. To solve this problem, Henderson Martin, Vice Governor of the Philippines, together with Mr. Miguel Cuaderno (who later became Central Bank governor) drafted the charter for a national bank. In February 4, 1916, Public Act 2612 was passed by the Philippine legislature providing for the establishment of the PNB to replace the small P1 million government-owned Agricultural Bank. PNB's first head office was the Masonic Temple along Escolta, the then "Wall Street of the Philippines" in the bustling district of Sta. Cruz in Manila. An American, H. Parker Willis, was its first president. "The First Universal Bank in the country" With PNB's establishment, Filipinos found a bank of their own. PNB was authorized to grant short and long-term loans to agriculture and industry. The Filipino farmers then could avail of loans with interest between 8% to 10% per...
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...(AUB) is among the very few commercial banks that was granted a full-branch license in 1997 and is operating until this day. AUB was registered with the Securities and Exchange Commission (SEC) on October 3, 1997. Its registered office and principal executive offices are located at Joy-Nostalg Center, 17 ADB Avenue, Ortigas Center, Pasig City, Philippines. AUB was granted the authority to operate as a commercial bank under the Monetary Board (MB) Resolution No. 1149 dated September 3, 1997 and commenced operations on October 31, 1997. In 2012, it obtained approval from the Bangko Sentral ng Pilipinas (BSP) to upgrade its license into expanded commercial banking status. In 2013, the Bank was granted an authority to operate as a universal bank under MB Resolution No. 356 dated February 28, 2013. The universal banking license authorizes, AUB, in addition to its general powers as a commercial bank, to exercise the following: (1)...
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...INTRODUCTION As described in the chapter 1, the banking industry around the world has been changing very rapidly since the early 1970s. The industry has experienced a substantial change in competitive conditions as a result of a number of factors. Therefore, what makes an excellence bank strategy? What strategy as it applies to banking? Is it because of new competitors entering the financial services market made new approaches to servicing corporate clients? There are a lot of questions comes into our mind but we will answer all the questions later. For your information, banks potray themselves as a “One Stop Financial Services Centre”. Banks no longer remain in their traditional service market because they are now more aggressive in providing a full menu of services that will cater for its customer’s needs. Therefore, what is the type of services that bank provide for their customers that make them satisfied with the speed efficiency and cost involved? Then, as described in the chapter 2, we can conclude that the main goal of any financial service organization is to create for itself a “sustainable competitive advantage” in the market place. So, in order to do this, it has to generate products, services or ideas that offer superior value for its customers that is not easily imitated by competitors. Financial services especially banks should used 4Ps which is price, product, place and promotion for their marketing tools for influencing customers. Therefore, in this assignment...
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...The Indian Internet Banking Journey We want to use the Internet to become a universal banking major." - Nachiket Mor, Head of ICICI's Treasury, in March 2000. The Internet Banking Boom In 2001, a Reserve Bank of India survey revealed that of 46 major banks operating in India, around 50% were either offering Internet banking services at various levels or planned to in the near future. According to a research report,1 while in 2001, India's Internet user base was an estimated 9 lakh; it was expected to reach 90 lakh by 2003. Also, while only 1% of these Internet users utilized the Internet banking services in 1998, the Internet banking user base increased to 16.7% by mid- 2000. Many of the major banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global Trust Bank (GTB), Bank of Punjab and UTI were offering Internet banking services. Based on the above statistics and the analysts' comments that India had a high growth potential for Internet banking, the players focused on increasing and improving their Internet banking services. As a part of this, the banks began to collaborate with various utility companies to enable the customers to perform various functions online. ICICI's 'Infinity,' which was already a leader in the Indian Internet banking arena, began to allow its customers to pay their online real time shopping bills. HDFC, through its 'payment gateway' feature, allowed its Internet banking customers to make online and real time payments for their purchases. | ...
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...unprecedented in size and scale in the Philippine banking industry, Banco De Oro Unibank (BDO) today represents a firm consolidation of distinct strengths and advantages built over the years by the entities behind its history. More importantly, BDO is an institution that does more than honor its past; it continues to improve on its present, and moves with innovation and dynamism toward an even stronger future. BDO’s reputation as a full-service universal bank remains as formidable as ever. It has the ability to provide a complete array of industry-leading products and services to the retail and corporate markets including Lending (corporate, commercial, consumer, and SME), Deposit-taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards, Corporate Cash Management and Remittances. Through its subsidiaries, the Bank offers Leasing and Financing, Investment Banking, Private Banking, Bancassurance, Insurance Brokerage and Stock Brokerage services. Its institutional strengths and value-added products and services hold the key to its successful business relationships with customers. On the front line, branch banking has continuously been setting high standards as a sales and service-oriented, customer-focused force. Through selective acquisitions and organic growth, BDO is positioning for increased strength and continuing expansion into new markets. BDO Retail Internet Banking With BDO Retail Internet Banking (RIB) you may: • Inquire the balance...
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...Taras Shevchenko Kyiv National University Faculty of Economics Department of International Economics and Marketing Term essay Course: «International Banking» Topic: «Comparative cross-border assessment of the Crédit Agricole S.A. and its affiliate in Ukraine performance» Written by: Victoria Shevchenko 1st year student of a Master’s Program Department of International Economics and Marketing Supervisor: PhD associate professor Volodymyr U. Shevchenko Kyiv-2014 Crédit Agricole Group is the leading financial partner to the French economy and one of the largest banking groups in Europe. It is the leading retail bank (provides services to the household (consumer) sector) in Europe, asset manager, bancassurer and global leader in aircraft financing. According to The Banker magazine Western European banks still dominate the EU bank rankings in terms of Tier 1 capital. In 2013 three French banks were worldwide TOP-10 in terms of Tier 1 capital and assets [1]. According to the Accuity research company in 2012 Credit Agricole was fourth among 50 banks all over the world in terms of assets [2]. Crédit Agricole S.A., so called Central body of the Regional Banks, lead institution of the Group, is a French Public Limited Company (Société Anonyme) with a share capital of €7,504,770 thousand, divided into 2,501,589,997 shares with a par value of 3 euros each, is majority owned (56%) by 39 French co-operative retail banks (Regional Banks) but at that time Crédit Agricole...
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