BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar
|
|
- Jessie Owen
- 6 years ago
- Views:
Transcription
1 1 BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar L3: Liquidity and Reserves Management: Strategies and Policies
2 Key Topics Sources of Demand for and Supply of Liquidity Why Financial Firms Have Liquidity Problems Liquidity Management Strategies Estimating Liquidity Needs The Impact of Market Discipline Legal Reserves and Money Management
3 Introduction One of the most important tasks the management of any financial institution faces is ensuring adequate liquidity at all times A financial firm is considered to be liquid if it has ready access to immediately spendable funds at reasonable cost at precisely the time those funds are needed This suggests that a liquid financial firm either has The right amount of immediately spendable funds on hand when they are required They can raise liquid funds in timely fashion by borrowing or selling assets Lack of adequate liquidity can be one of the first signs that a financial institution is in trouble A financial firm can be closed if it cannot raise sufficient liquidity even though, technically, it may still be solvent
4 The Demand for and Supply of Liquidity Demands for Liquidity Customer deposit withdrawals Credit requests from quality loan customers Repayment of nondeposit borrowings Operating expenses and taxes Payment of stockholder dividends Supplies of Liquid Funds Incoming customer deposits Revenues from the sale of nondeposit services Customer loan repayments Sales of bank assets Borrowings from the money market
5 The Demand for and Supply of Liquidity (continued) These various sources of liquidity demand and supply come together to determine each financial firm s net liquidity position at any moment in time That net liquidity position (L) at time t is Liquidity Deficit is L t < 0 and Liquidity Surplus is L t > 0
6 The Demand for and Supply of Liquidity (continued) The essence of liquidity management problems for financial institutions 1. Rarely are demands for liquidity equal to the supply of liquidity at any particular moment in time The financial firm must continually deal with either a liquidity deficit or a liquidity surplus. 2. There is a trade-off between liquidity and profitability The more resources are tied up in readiness to meet demands for liquidity, the lower is that financial firm s expected profitability (other factors held constant)
7 Why Financial Firms Often Face Significant Liquidity Problems Imbalances between maturity dates of their assets and liabilities High proportion of liabilities (especially demand deposits and money market borrowings) are subject to immediate repayment Sensitivity to changes in interest rates May affect customer demand for deposits May affect customer demand for loans Central role in the payment process, reputation and public confidence in the system
8 Strategies for Liquidity Managers Think about what is a liquid asset? Liquid assets have a ready market, stable price and are reversible Identify strategies for liquidity management Asset Liquidity Management or Asset Conversion Strategy This strategy calls for storing liquidity in the form of liquid assets (Tbills, fed funds loans, CDs, etc.) and selling them when liquidity is needed Borrowed Liquidity or Liability Management Strategy This strategy calls for the bank to purchase or borrow from the money market to cover all of its liquidity needs Balanced Liquidity Strategy The combined use of liquid asset holdings (Asset Management) and borrowed liquidity (Liability Management) to meet liquidity needs
9 Strategies for Liquidity Managers (continued) Guidelines for Liquidity Managers Keep track of all fund-using and fund-raising departments Know in advance withdrawals by the biggest credit or deposit customers Priorities and objectives for liquidity management should be clear Liquidity needs must be evaluated on a continuing basis
10 Estimating Liquidity Needs Sources and Uses of Funds Approach Structure of Funds Approach Liquidity Indicator Approach The Ultimate Standard for Assessing Liquidity Needs: Signals from the Marketplace
11 11-11 Estimating Liquidity Needs (continued) Sources and Uses of Funds Approach Loans and deposits must be forecast for a given liquidity planning period The estimated change in loans and deposits must be calculated for the same planning period The liquidity manager must estimate the bank s net liquid funds by comparing the estimated change in loans to the estimated change in deposits
12 Estimating Liquidity Needs (continued) Sources and Uses of Funds Approach
13 Estimating Liquidity Needs (continued) Sources and Uses of Funds Approach
14 Estimating Liquidity Needs (continued) Sources and Uses of Funds Approach
15 Estimating Liquidity Needs (continued) Structure of Funds Approach A Bank s Deposits and Other Sources of Funds Divided Into Categories. For Example: Hot Money Liabilities (volatile liabilities) Vulnerable Funds Stable Funds (core deposits or core liabilities) Liquidity Manager Set Aside Liquid Funds According to Some Operating Rule
16 Estimating Liquidity Needs (continued) Structure of Funds Approach For example, the manager may decide to set up A 95 percent liquid reserve behind all hot money funds (less any required legal reserves held behind hot money deposits) 30 percent in liquid reserves for vulnerable deposit and nondeposit liabilities 15 percent or less in liquid reserves for stable (core) funds sources
17 Estimating Liquidity Needs (continued) Structure of Funds Approach Combining both loan and deposit liquidity requirements, this institution s total liquidity requirement would be
18 Estimating Liquidity Needs (continued) Structure of Funds Approach Many financial firms like to calculate their expected liquidity requirement, based on the probabilities they assign to different possible outcomes
19 Estimating Liquidity Needs (continued) Liquidity Indicator Approach 1. Cash position indicator 2. Liquid securities indicator 3. Net federal funds and repurchase agreements position 4. Capacity ratio 5. Pledged securities ratio 6. Hot money ratio 7. Deposit brokerage index 8. Core deposit ratio 9. Deposit composition ratio 10. Loan commitments ratio
20 11-20 Estimating Liquidity Needs (continued) The Ultimate Standard for Assessing Liquidity Needs: Signals from the Marketplace Liquidity managers should closely monitor the following market signals: 1. Public confidence 2. Stock price behavior 3. Risk premiums on CDs and other borrowings 4. Loss sales of assets 5. Meeting commitments to credit customers 6. Borrowings from the central bank
21 11-21 Legal Reserves and Money Position Management Legal Reserves Those assets that law and central bank regulation say must be held during a particular time period The current system of accounting for legal reserves is called lagged reserve accounting (LRA) The daily average amount of deposits and other reservable liabilities are computed using information gathered over a two-week period stretching from a Tuesday through a Monday two weeks later This interval of time is known as the reserve computation period The daily average amount of vault cash each depository institution holds is also figured over the same two-week computation period
22 11-22 EXHIBIT 11 1 Federal Reserve Rules for Calculating a Weekly Reporting Depository Institution s Required Legal Reserves
23 11-23 Legal Reserves and Money Position Management (continued) Legal Reserves Only two kinds of assets can be used for this purpose 1. Cash in the vault 2. Deposits held in a reserve account with the regional Fed The reserve requirement in 2010 was 3 percent of the end-of-the-day daily average amount held over a two-week period, from $10.7 million up to $58.8 million The first $10.7 million have zero legal reserves The $58.8 million figure is known as the reserve tranche and changes every year based on deposit growth Transaction deposits over $58.8 million held by the same depository institution carried a 10 percent legal reserve requirement This annual legal reserve adjustment is designed to offset inflation
24 11-24 Legal Reserves and Money Position Management (continued) Calculating Required Reserves The largest depository institutions must hold the largest percentage of legal reserves Each reservable liability item is multiplied by the stipulated reserve requirement percentage to derive each depository s total legal reserve requirement
25 11-25 Legal Reserves and Money Position Management (continued) Calculating Required Reserves The largest depository institutions must hold the largest percentage of legal reserves Each reservable liability item is multiplied by the stipulated reserve requirement percentage to derive each depository s total legal reserve requirement
26 11-26 Legal Reserves and Money Position Management (continued) Clearing Balances In addition to holding a legal reserve account at the central bank, many depository institutions also hold a clearing balance with the Fed to cover any checks or other debit items drawn against them For example, suppose a bank had a clearing balance averaging $1 million during a particular two-week maintenance period and the Federal funds interest rate over this same period averaged 5.50 percent Then it would earn a Federal Reserve credit of Assuming a 360-day year for ease of computation, this bank could apply up to $2, to offset any fees charged to the bank for its use of Federal Reserve services
27 11-27 Legal Reserves and Money Position Management (continued) Factors Influencing the Money Position
28 11-28 Legal Reserves and Money Position Management (continued) Sweep Accounts Volume of legal reserves held at the Fed has declined in recent years largely due to sweep accounts A contractual account between a bank and a customer that permits the bank to move funds out of a customer s checking account overnight in order to generate higher returns for the customer and lower reserve requirements for the bank Retail Sweep Business Sweep The sweeps market is likely to change in form and importance due to the recent passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2009
29 11-29 Legal Reserves and Money Position Management (continued) Other Factors to Influence Legal Reserves Use of Fed Funds Market The cheapest source But very volatile Managers rely on the Fed funds target rate (the most volatile on the settlement date) Other Options Sell liquid securities Draw upon excess correspondent balances Enter into repurchase agreements for temporary borrowings Sell new time deposits Borrow in the Eurocurrency market
30 11-30 EXHIBIT 11 2 Movements in the Effective Federal Funds Rate, Its Target (the Intended Federal Funds) Rate, and the Discount (Primary Credit) Rate for Depository Institutions Seeking Credit from the Federal Reserve Banks
31 Factors in Choosing among the Different Sources of Reserves In choosing which source of reserves to draw upon to cover a legal reserve deficit, managers must carefully consider several aspects of their institution s need for liquid funds: 1. Immediacy of need 2. Duration of need 3. Access to the market for liquid funds 4. Relative costs and risks of alternative sources of funds 5. The interest rate outlook 6. Outlook for central bank monetary policy 7. Rules and regulations applicable to a liquidity source
32 11-32 Central Bank Reserve Requirements around the Globe Not all central banks impose legal reserve requirements on the depository institutions they regulate For example, the Bank of England has not established official reserve requirements for its banks There is a trend among central banks around the globe to eliminate, suspend, or at least make less use of the reserve requirement tool, in part because it is so difficult to control A notable exception is the European Central Bank (ECB) Even if central banks imposed no reserve requirements, managers of depository institutions would still have a demand for cash reserves All depository institutions at one time or another need immediately available funds to handle customer withdrawals, meet new loan demand, and satisfy other emergency cash needs
33 11-33 Quick Quiz What are the principal sources of liquidity demand for a financial firm? What are the principal sources from which the supply of liquidity comes? Why do financial firms face significant liquidity management problems? What are the principal differences among asset liquidity management, liability management, and balanced liquidity management? How does the sources and uses of funds approach help a manager estimate a financial institution s need for liquidity? How can the discipline of the marketplace be used as a guide for making liquidity management decisions? What are sweep accounts? Why have they led to a significant decline in the total legal reserves held at the Federal Reserve banks by depository institutions operating in the United States? What impact has recent financial reform legislation had on raising short-term cash?
McGraw-Hill/Irwin Bank Management and Financial Services, 7/e 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Bank Reserves Management Legal Reserves Legal Reserves Those assets that law and central bank regulation say must be held during a particular time period The current system of accounting for legal reserves
More informationBBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar
BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar L7: Lending Policies and Procedures: Managing Credit Risk www.lecturenotes638.wordpress.com 16-2 Key Topics Types of Loans Banks and Competing
More informationBBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar
1 BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar L1: Overview of the Financial Services Sector 1-2 2 Key Topics Powerful Forces Reshaping the Industry What Is a Bank? The Financial System
More informationBBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar
BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar L6: The Management of Capital www.lecturenotes638.wordpress.com 15-2 Key Topics The Many Tasks of Capital Capital and Risk Exposures Types
More informationMONEY, THE PRICE LEVEL, AND INFLATION
25 MONEY, THE PRICE LEVEL, AND INFLATION What is Money? Money is any commodity or token that is generally acceptable as a means of payment. A means of payment is a method of settling a debt. Money has
More informationGovernment Policy and Regulation on the Financial-Services Industry
Government Policy and Regulation on the Financial-Services Industry 2-1 Key Topics The Principal Reasons for Banking and Financial- Services Regulation Major Financial-Services Regulators and Laws Some
More informationFREQUENTLY ASKED QUESTIONS REGARDING SECTIONS 343 and 627 of the DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
FREQUENTLY ASKED QUESTIONS REGARDING SECTIONS 343 and 627 of the DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT Updated as of August 9, 2011 Please be aware that since the last version of the
More informationVOLUNTARY GUIDELINES FOR THE MANAGEMENT OF STABLE NET ASSET VALUE (NAV) LOCAL GOVERNMENT INVESTMENT POOLS
VOLUNTARY GUIDELINES FOR THE MANAGEMENT OF STABLE NET ASSET VALUE (NAV) LOCAL GOVERNMENT INVESTMENT POOLS Recommended Best Practices for Stable NAV LGIPs FEBRUARY 26, 2016 This document offers best practices
More informationInternational Finance
International Finance FINA 5331 Lecture 3: The Banking System William J. Crowder Ph.D. Historical Development of the Banking System Bank of North America chartered in 1782 Controversy over the chartering
More informationMcGraw-Hill/Irwin Bank Management and Financial Services, 7/e 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Funding the Bank Key Issues Depository Institutions Are Faced With: 12-2 1. Where can funds be raised at lowest possible cost? 2. How can management ensure that there are enough deposits to support lending
More informationBBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar
BBI2353 Commercial Bank Management Prepared by Dr Khairul Anuar L8: Lending to Business Firms and Pricing Business Loans www.lecturenotes638.wordpress.com 17-2 Key Topics Types of Business Loans: Short
More informationBank Management, 6th edition. Timothy W. Koch and S. Scott MacDonald Copyright 2006 by South-Western, a division of Thomson Learning
Bank Management, 6th edition. Timothy W. Koch and S. Scott MacDonald Copyright 2006 by South-Western, a division of Thomson Learning Funding the Bank and Managing Liquidity Chapter 8 William Chittenden
More informationLiquidity Management For Security Dealers That Are Not Licensed Deposit Takers
FINANCIAL SERVICES COMMISSION SECURITIES BULLETIN Liquidity Management For Security Dealers That Are Not Licensed Deposit Takers November 22, 2004 1.0 Background Licensees have significant holdings of
More informationChapter 6 : Money Markets
1 Chapter 6 : Money Markets Chapter Objectives Provide a background on money market securities Explain how institutional investors use money markets Explain the globalization of money markets 2 Why so
More informationBalance Sheet and Income Statement of a Commercial Bank
Balance Sheet and Income Statement of a Commercial Bank Economics of Financial Intermediation March 7, 2017 Financial information on commercial banks is reported in two basic documents: The report of condition
More informationHow Does the Banking System Work? (EA)
How Does the Banking System Work? (EA) What do you notice when you enter a bank? Perhaps you pass an automated teller machine in the lobby. ATMs can dispense cash, accept deposits, and make transfers from
More informationThe Central Bank s Balance Sheet
The Central Bank Balance Sheet, the Money Supply Process, and the Money Multiplier McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved. The Central Bank s Balance Sheet
More informationThe Monetary System CHAPTER. Goals. Outcomes
CHAPTER 29 The Monetary System Goals in this chapter you will Consider what money is and what functions money has in the economy Learn what the Federal Reserve System is Examine how the banking system
More informationANALYZING BANK PERFORMANCE
ANALYZING BANK PERFORMANCE Key Topics An Overview of the Balance Sheets and Income Statements of Banks The Balance Sheet or Report of Condition Asset Items Liability Items Components of the Income Statement:
More informationBank Financial Statements
5-1 Bank Financial Statements Report of Condition Balance Sheet Report of Income Income Statement Key Items on Bank Financial Statements 5-3 Report of Condition The Balance Sheet of a Bank Showing its
More informationMonetary Policy Tools
CHAPTER 20 Monetary Policy Tools In the fall of 2001, the Federal Reserve made headlines again and again. In the immediate aftermath of the terrorist attacks in New York and Washington on September 11,
More informationThis lecture examines how banking is conducted to earn the highest possible profit.
Banking and the Management of Financial Institutions This lecture examines how banking is conducted to earn the highest possible profit. The Bank Balance Sheet A. The basic bank balance sheet B. Assets
More informationMonetary Policy INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT
Monetary Policy INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT 2 MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT MONETARY POLICY INSTRUMENTS AND INTERNATIONAL RESERVES MANAGEMENT
More information1Q15 Quarterly Supplement
1Q15 Quarterly Supplement April 14, 2015 2015 Wells Fargo & Company. All rights reserved. Table of contents 1Q15 Results - 1Q15 Highlights Page 2 - Year-over-year results 3-1Q15 Revenue diversification
More informationMargin investing. A guide for Vanguard Brokerage clients
Margin investing A guide for Vanguard Brokerage clients Please read this brochure carefully before you apply for a margin account. This complex, high-risk strategy isn t appropriate for all investors.
More informationBank Assets BANK FINANCIAL STATEMENTS. The Balance Sheet Conceptually. Bank Securities. Types of Loans. Balance Sheet Deposits. Cash & Due from Banks
BANK FINANCIAL STEMENTS Bank Assets Cash and due from banks Vault cash, deposits held at the Fed and other financial institutions, and cash items in the process of collection Investment Securities Bonds,
More informationManaging Risk off the Balance Sheet with Derivative Securities
Managing Risk off the Balance Sheet Managing Risk off the Balance Sheet with Derivative Securities Managers are increasingly turning to off-balance-sheet (OBS) instruments such as forwards, futures, options,
More informationCh. 2 AN OVERVIEW OF THE FINANCIAL SYSTEM
Ch. 2 AN OVERVIEW OF THE FINANCIAL SYSTEM To "finance" something means to pay for it. Since money (or credit) is the means of payment, "financial" basically means "pertaining to money or credit." Financial
More informationCommon Stock Par Value $.01 per Share Dividend Reinvestment and Stock Purchase Plan
Common Stock Par Value $.01 per Share Dividend Reinvestment and Stock Purchase Plan This prospectus describes Bank of Hawaii Corporation s Dividend Reinvestment and Stock Purchase Plan ( the Plan ). The
More informationAP Macroeconomics. Monetary Policy
AP Macroeconomics Monetary Policy Monetary Policy Central bank (The Fed, Bank of Japan, ECB, Bank of England ) efforts to promote full employment, maintain price stability, and encourage long-run economic
More informationChapter 9. Banks and Bank Management. Depository Institutions: The Big Questions
Chapter 9 Banks and Bank Management Depository Institutions: The Big Questions Where do commercial banks get their funds and what do they do with them? How do commercial banks manage their balance sheets?
More informationChapter 10. Banking and the Management of Financial Institutions
Chapter 10 Banking and the Management of Financial Institutions The Bank Balance Sheet Liabilities Checkable deposits Nontransaction deposits Borrowings Bank capital 10-2 The Bank Balance Sheet (cont d)
More informationFOCUS NOTE. Even the most mature microfinance. Asset and Liability Management for Deposit-Taking Microfinance Institutions
FOCUS NOTE No. 55 June 2009 Karla Brom Asset and Liability Management for Deposit-Taking Microfinance Institutions Even the most mature microfinance institutions (MFIs) need to pay attention to their balance
More informationCASH MANAGEMENT. After studying this chapter, the reader should be able to
C H A P T E R 1 1 CASH MANAGEMENT I N T R O D U C T I O N This chapter continues the discussion of cash flows. It illustrates the fact that net income shown on an income statement does not imply that there
More informationEcon 202 Homework 5 Monetary Policy - 25 Points
1. Money serves all following economic functions EXCEPT: a. a source of economic wealth. b. a method of exchange. c. a standard of value. d. a store of value. 2. The term liquidity refers to a. the ability
More informationSeasonal Factors Affecting Bank Reserves
Seasonal Factors Affecting Bank Reserves THE ABILITY and to some extent the willingness of member banks to extend credit are based on their reserve positions. The reserve position of banks as a group in
More informationApril 23, For 1Q 2018, reported return on assets (ROA) was 2.20% and the efficiency ratio was 50.6%. Highlights for 1Q 2018:
WSFS Reports Net Income of $37.4 Million and 1Q 2018 EPS of $1.16. Results Positively Impacted by a $15.3 Million Pre-Tax Valuation Gain on Visa Class B Shares and a $1.7 Million Fraud Recovery. Strong
More informationThe Money Supply Process Hubbard, Chap Understand the roles of the Fed, banks, and households in the money supply process.
The Money Supply Process Hubbard, Chap 17. Key Points 1. Understand the roles of the Fed, banks, and households in the money supply process. 2. Definition of the monetary base. 3. U.S. banking system is
More informationBen Franklin Financial, Inc Annual Report
Ben Franklin Financial, Inc. 2017 Annual Report Ben Franklin Financial, Inc. Annual Report For the Year Ended December 31, 2017 Table of Contents Business... 1 Management s Discussion and Analysis of
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose government has a budget deficit of $500 billion. If there is no Ricardo-Barro
More informationChapter 15. Multiple Deposit Creation and the Money Supply Process
Chapter 15 Multiple Deposit Creation and the Money Supply Process Players in the Money Supply Process Central bank - the government agency that oversees the banking system and is responsible for the conduct
More information12/03/2012. What is Money?
Money has taken many forms. What is money today? What happens when the bank lends the money we re deposited to someone else? How does the Bank of Canada influence the quantity of money? What happens when
More informationPERSHING LLC (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Statement of Financial Condition.
Statement of Financial Condition Statement of Financial Condition Table of Contents Statement of Financial Condition 1 Notes to Statement of Financial Condition 2 Page Statement of Financial Condition
More informationPart C. Banks' Financial Reporting Lectures 6&7. Banks Balance Sheet (II)
Part C. Banks' Financial Reporting Lectures 6&7. Banks Balance Sheet (II) Lecture 7 Outline 2 6.1. Banks' Assets 6.2. Banks' Liabilities 3 For bank liabilities, the ranking positions is reversed compared
More informationECON 3303 Money and Banking Exam 2 Summer MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 3303 Money and Banking Exam 2 Summer 2017 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If gold becomes acceptable as a medium of exchange,
More informationWhen you have completed the module you should revise the quiz and the review tasks.
Introduction An important part of your role on the management committee is to monitor and control the financial dealings of the organisation. To do this you need to read, understand, analyse and query
More informationMidtier Banks and Credit Unions Can Compete and Win in Today s Credit Card Marketplace
Midtier Banks and Credit Unions Can Compete and Win in Today s Credit Card Marketplace Dennis C. Moroney, Research Director Retail Banking & Cards, TowerGroup October 2011 Executive Summary The combination
More informationChapter 6. Managing Liabilities
Chapter 6 Managing Liabilities Composition of Bank Liabilities Different types of liabilities Interest-bearing and non-interest-bearing Transaction accounts: Low explicit interest rates High non-interest
More informationMacroeconomics LESSON 4 ACTIVITY 38
Macroeconomics LESSON 4 ACTIVITY 38 The Federal Reserve: The Mechanics of Monetary Policy To manage the money supply, the Federal Reserve uses the tools of monetary policy to influence the quantity of
More information2.4.3.G1. Savings Tools. Advanced Level
Savings Tools Advanced Level Types of Savings Tools Savings tools - secure and liquid accounts offered by depository institutions assisting in the management of a savings fund Checking Account Savings
More informationChapter 9. Banking and the Management of Financial Institutions
Chapter 9 Banking and the Management of Financial Institutions Copyright 2007 Pearson Addison-Wesley. All rights reserved. 9-2 Basic Banking Cash Deposit First National Bank First National Bank Assets
More informationIntroduction. Master Programmes INTERNATIONAL FINANCE. Szabolcs Sebestyén
Introduction Szabolcs Sebestyén szabolcs.sebestyen@iscte.pt Master Programmes INTERNATIONAL FINANCE Sebestyén (ISCTE-IUL) Introduction International Finance 1 / 43 Outline 1 Why Study Money, Banking, and
More informationEXAM 3: Version A. Econ 2203 Fall Instructions:
EXAM 3: Version A Econ 2203 Fall 2012 Instructions: 1. Write your name and the version (A or B) on your scantron. 2. Choose the best available answer and indicate your choice on your scantron sheet using
More informationCHAPTER 32 Money Creation
CHAPTER 32 Money Creation A. Short-Answer, Essays, and Problems 1. What is the history behind the idea of a fractional reserve banking system? Early traders used gold in making transactions. They realized
More informationANSWER KEY ANSWERS ARE AT END. ECONOMICS 353 L. Tesfatsion/Fall 2010 MIDTERM EXAM 1: 50 Questions (1 Point Each) 28 September 2010
ANSWER KEY ANSWERS ARE AT END ECONOMICS 353 L. Tesfatsion/Fall 2010 MIDTERM EXAM 1: 50 Questions (1 Point Each) 28 September 2010 On side 1 of your bubble sheet, give your FIRST AND LAST NAME together
More informationPA Policy Responses to the Great Recession Lecture 6 (9/22/09) Instructor: Menzie Chinn Fall 2009
PA974-001 Policy Responses to the Great Recession Lecture 6 (9/22/09) Instructor: Menzie Chinn Fall 2009 Outline Interpreting balance sheets, and Managing liquidity risk, Asset Management, Capital Adequacy
More informationREADY ASSETS PRIME MONEY FUND (the Fund ) Supplement dated September 2, 2015 to the Prospectus of the Fund, dated August 28, 2015
READY ASSETS PRIME MONEY FUND (the Fund ) Supplement dated September 2, 2015 to the Prospectus of the Fund, dated August 28, 2015 This Supplement was previously filed on July 29, 2015. The Board of Trustees
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 10-Q
(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
More informationReady. Set. know. Understanding TILA-RESPA Integrated Disclosure (TRID)
Ready. Set. know. Understanding TILA-RESPA Integrated Disclosure (TRID) How our competition is handling TRID. Relying on 3rd party vendors to provide material Communicating what we need to know through
More informationTHE SINGLE MONETARY POLICY IN STAGE THREE. General documentation on ESCB monetary policy instruments and procedures
EUROPEAN CENTRAL BANK MONETARY POLICY SUB-COMMITTEE THE SINGLE MONETARY POLICY IN STAGE THREE General documentation on ESCB monetary policy instruments and procedures September 1998 European Central Bank,
More informationTHE SOUTHERN BANC COMPANY, INC.
A N N U A L R E P O R T THE SOUTHERN BANC COMPANY, INC. Dear Fellow Shareholders, 2018 was almost a break out year for us. We produced pre-tax net income of $154,000, a 9.64% increase in Net Loans, an
More informationMONEY, THE PRICE LEVEL, AND INFLATION
24 MONEY, THE PRICE LEVEL, AND INFLATION After studying this chapter, you will be able to: Define money and describe its functions Explain the economic functions of banks Describe the structure and functions
More informationMaturity Date: January 31, 2017*. Fees and Discounts:
Disclosure supplement To disclosure statement dated March 8, 2010 JPMorgan Chase Bank, National Association $3,026,000 EQUITY LINKED CDs due January 31, 2017 General Certificates of deposit (the CDs )
More informationTHE SOUTHERN BANC COMPANY, INC.
2017 A N N U A L R E P O R T THE SOUTHERN BANC COMPANY, INC. Dear Fellow Shareholders, 2017 was a better year than 2016, however bad loans continued to plague the Bank. After so many years of clean health,
More informationChapter 9. Banking and the Management of Financial Institutions. 9.1 The Bank Balance Sheet
Chapter 9 Banking and the Management of Financial Institutions 9.1 The Bank Balance Sheet 1) Which of the following statements are true? A) A bankʹs assets are its sources of funds. B) A bankʹs liabilities
More informationCITY OF CHINO STATEMENT OF INVESTMENT POLICY ADOPTED APRIL 2, 2019
CITY OF CHINO STATEMENT OF INVESTMENT POLICY ADOPTED APRIL 2, 2019 1.0 POLICY: This statement is intended to provide guidelines for the prudent investment of the temporarily idle cash of the City of Chino
More informationLiquidity CAPITAL ASSET QUALITY MANAGEMENT EARNINGS LIQUIDITY SENSITIVITY TO MARKET RISK
represents a financial institution s ability to accommodate expected and unexpected withdrawals in deposits, decreases in other liabilities, and increases in assets. The stronger an institution s liquidity,
More information2Q15 Quarterly Supplement
2Q15 Quarterly Supplement July 14, 2015 2015 Wells Fargo & Company. All rights reserved. Table of contents 2Q15 Results - 2Q15 Highlights Page 2 - Year-over-year results 3 - Balance Sheet and credit overview
More informationIntroduction. Learning Objectives. Learning Objectives. Chapter 15. Money, Banking, and Central Banking. Define the fundamental functions of money
Chapter 15 Money, Banking, and Central Banking Introduction About 20 billion new U.S. coins will be put into circulation this year, and new paper currency will be printed as well. These new coins and currency
More informationCHAPTER 2 MONEY MANAGEMENT SKILLS
CHAPTER 2 MONEY MANAGEMENT SKILLS CHAPTER OVERVIEW Successful money management is based on organized financial records, accurate personal financial statements, and effective budgeting. This chapter offers
More informationPFIN 7: Buying Decisions 45
PFIN 7: Buying Decisions 45 7-1 Buying Plans OBJECTIVES Explain the advantages of using a buying plan. List the steps of a buying plan. Set criteria for selecting one item over another to buy. Explain
More information3 The Implementation of Monetary Policy. The Market for Federal Reserve Balances
3 The Implementation of Monetary Policy The Federal Reserve exercises considerable control over the demand for and supply of balances that depository institutions hold at the Reserve Banks. In so doing,
More informationEcon 116 Problem Set 3 Answer Key
Econ 116 Problem Set 3 Answer Key 1. Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on its liability side deposits of 7000. Assume that the required reserve ratio is 10
More information1 October Statement of Policy Governing the Acquisition and Management of Financial Assets for the Bank of Canada s Balance Sheet
1 October 2015 Statement of Policy Governing the Acquisition and Management of Financial Assets for the Bank of Canada s Balance Sheet Table of Contents 1. Purpose of Policy 2. Objectives of Holding Financial
More informationAn-Najah National University. Prepared by Instructor: E.Shatha Qamhieh Course Title: Managerial Finance
An-Najah National University Prepared by Instructor: E.Shatha Qamhieh Course Title: Managerial Finance Current Liabilities Management Spontaneous liabilities: Financing that arises from the normal course
More informationPERSHING LLC (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Statement of Financial Condition.
Statement of Financial Condition (With Reports of Independent Registered Public Accounting Firm) Statement of Financial Condition Table of Contents Page Report of Independent Registered Public Accounting
More informationMonthly policy monetary report October monetary policy monthly report
Monthly policy monetary report October 2006 monetary policy monthly report OCTOBER 2006 October 2006 Monthly policy monetary report Main highlights Inflation developments Annual inflation in October experienced
More informationU.S. Bank National Association. Annual Company-Run Stress Test Disclosure
U.S. Bank National Association Annual Company-Run Stress Test Disclosure March, 2013 Page 1 Risks Included in the Stress Test U.S. Bank National Association (the Bank ) is U.S. Bancorp s (the Company )
More informationMoney and Banking. Semester 1/2016
Money and Banking Semester 1/2016 Score Allocation Quizzes 10% Mid-Term Exam 30% Final Exam 30% Individual and Group Reports 20% Class Participation 10% >>> Total 100% Classroom Disciplines I expect regular
More informationBBM2153 Financial Markets and Institutions Prepared by Dr Khairul Anuar
BBM2153 Financial Markets and Institutions Prepared by Dr Khairul Anuar L5: The Money Markets www. notes638.wordpress.com 5-1 Apple and its $18 billion In its 2013 annual report, Apple listed $18 billion
More informationEconomics of Money, Banking, and Fin. Markets, 10e (Mishkin) Chapter 10 Banking and the Management of Financial Institutions
Economics of Money, Banking, and Fin. Markets, 10e (Mishkin) Chapter 10 Banking and the Management of Financial Institutions 10.1 The Bank Balance Sheet 1) Which of the following statements are true? A)
More informationTemporary Liquidity Guarantee Program Frequently Asked Questions
FDIC: Temporary Liquidity Guarantee Program Frequently Asked Questions 1 of 22 3/9/2009 10:56 AM Home > Regulation & Examinations > Resources for Bank Officers & Directors > Temporary Liquidity Guarantee
More informationBrian P Sack: Implementing the Federal Reserve s asset purchase program
Brian P Sack: Implementing the Federal Reserve s asset purchase program Remarks by Mr Brian P Sack, Executive Vice President of the Federal Reserve Bank of New York, at the Global Interdependence Center
More informationTABLE OF CONTENTS. President's Letter to Shareholders Selected Consolidated Financial and Other Data... 2
3 TABLE OF CONTENTS Page President's Letter to Shareholders... 1 Selected Consolidated Financial and Other Data... 2 Management's Discussion and Analysis of Financial Condition and Results of Operations...
More informationInternationalEconomicTrends
InternationalEconomicTrends August International Interest Rate Linkages A change in the federal funds rate target often prompts observers to comment that other central banks are likely to follow suit by
More informationHow did Monetary Policy Implementation Change with the Financial Crisis?
How did Monetary Policy Implementation Change with the Financial Crisis? John McGowan Assistant Vice President Money Markets, Markets Group, FRBNY September 28, 2015 Internal FR I. FRS Mandate and Pre-
More informationRegulatory Capital Disclosures
The Goldman Sachs Group, Inc. Regulatory Capital Disclosures For the period ended December 31, 2013 0 Page Introduction The Goldman Sachs Group, Inc. (Group Inc.) is a leading global investment banking,
More informationCLIENT UPDATE QUESTIONS AND ANSWERS ON THE LIQUIDITY COVERAGE RATIO
CLIENT UPDATE QUESTIONS AND ANSWERS ON THE LIQUIDITY COVERAGE RATIO NEW YORK Byungkwon Lim blim@debevoise.com Gregory J. Lyons gjlyons@debevoise.com Lee A. Schneider lschneider@debevoise.com David L. Portilla
More informationand loan balances Treasury to invest surplus tax
Treasury to invest surplus tax and loan balances Legislation signed by the President on October 28, 1977, will allow the Treasury Department to earn a direct return on temporary cash surpluses. The new
More informationSKYBRIDGE DIVIDEND VALUE FUND OF FUNDVANTAGE TRUST STATEMENT OF ADDITIONAL INFORMATION. September 1, 2014
SKYBRIDGE DIVIDEND VALUE FUND Class A Class C Class I SKYAX SKYCX SKYIX OF FUNDVANTAGE TRUST STATEMENT OF ADDITIONAL INFORMATION September 1, 2014 This Statement of Additional Information ( SAI ) provides
More informationCredit Union Liquidity. Contingency Funding Plans Client Webinar Series Randy Thompson, Ph.D.
Credit Union Liquidity Contingency Funding Plans Client Webinar Series Randy Thompson, Ph.D. Regulatory Expectations - CFP, 741.12 2013 - NCUA issued rule - CFP, 741.12 establishing requirements for managing
More informationMBF1223 Financial Management Prepared by Dr Khairul Anuar
MBF1223 Financial Management Prepared by Dr Khairul Anuar L10 - Forecasting and Short-Term Financial Planning www.mba638.wordpress.com Learning Objectives 1. Understand the sources and uses of cash in
More information2. Why is it important for the Fed to know the size and the rate of growth of the money supply?
KOFA HIGH SCHOOL SOCIAL SCIENCES DEPARTMENT AP ECONOMICS EXAM PREP WORKSHOP # 4 > MONEY, MONETARY POLICY, AND ECONOMIC STABILITY NAME : DATE : All About The Ms : 1. What are the three basic functions of
More informationTESTIMONY BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON MONETARY POLICY
1 TESTIMONY BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON MONETARY POLICY June 28, 2012 Dr. Joseph T. Salerno Professor of Economics Lubin School of Business Pace University One
More informationAccounting 102A: Midterm #4
Accounting 102A: Midterm #4 1. Which of the following is a cash outflow connected to investing activities? A) Repurchase of treasury stock. B) Purchase of short-term investments. C) Purchase of property,
More informationROSEMEAD COMMUNITY DEVELOPMENT COMMISSION FINANCIAL STATEMENTS
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION FINANCIAL STATEMENTS Fiscal Year Ended ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION FINANCIAL STATEMENTS Fiscal Year Ended TABLE OF CONTENTS INDEPENDENT AUDITOR S
More informationKey Business Ratios v 2.0 Course Transcript Presented by: TeachUcomp, Inc.
Key Business Ratios v 2.0 Course Transcript Presented by: TeachUcomp, Inc. Course Introduction Welcome to Key Business Ratios, a presentation of TeachUcomp, Inc. This course examines key ratios used to
More informationWELLS FARGO REPORTS $5.8 BILLION IN NET INCOME Diluted EPS of $1.04, Revenue Up 3 Percent from Prior Year
Media Mary Eshet Tuesday, April 14, Investors Jim Rowe 704-383-7777 415-396-8216 WELLS FARGO REPORTS $5.8 BILLION IN NET INCOME Diluted EPS of $1.04, Revenue Up 3 Percent from Prior Year Strong financial
More information2010 Pearson Addison Wesley CHAPTER 1
CHAPTER 1 Money has taken many forms. What is money today? What happens when the bank lends the money we re deposited to someone else? How does the Fed influence the quantity of money? What happens when
More informationUNION HAMILTON REINSURANCE, LTD. (A wholly-owned subsidiary of Wells Fargo & Company) FINANCIAL STATEMENTS
FINANCIAL STATEMENTS As of, and for the Years then Ended (With Independent Auditors Report Thereon) NOT FOR DISCLOSURE BALANCE SHEETS ($ in thousands, except par value and shares) 2017 2016 ASSETS Investment
More information