hnd金融业.doc

1. Banker to the Government The Bank maintains accounts on behalf of the government. The main account is the Exchequer Account. Government receipts from taxation, borrowing, etc are paid into this account. Expenditure on the economy: welfare, health, education, etc, is paid out of this account. The accounts of government departments are also held at the Bank. Banker to Banks High Street banks keep hold of their cash reserves at the Bank of England. These funds are used to settle clearing balances. Payments from the private sector to the government are made by cheques drawn on the accounts of the UK clearing banks at the Bank of England. Clearing banks keep part of their cash reserves at the Bank of England for convenience but banks are also legally required to keep a percentage of their deposits at the Bank of England. This percentage changes from time to time. The Bank maintains a current account for banks for: i. Operational balances, which are held for the settlement of clearing differences and ii. Non Operational balances that are held to fulfill cash ratio deposit requirements iii. Special deposits are required to be held with the Bank from time to time. Note Issue 1) In England and Wales the Bank is the sole bank for note issue. 2) In Scotland and Northern Ireland banks issue their own notes under strict regulation. 3) In other words the note issue is based purely on faith that notes will be acceptable to UK residents in settlement of debts at all times. Management of the National Debt The bank is responsible for managing the National Debt on the government?s behalf and has done so since 1751. The Debt Management Office records are kept of those who hold government stocks, ie gilts. Management of the National Debt involves helping the government with its short and long-term finance. It raises short-term finance through the issue of Treasury Bills and long-term finance through gilt-edged securities. It advises the Treasury on the issue of gilts and organizes their sale to the public and to financial institutions. The Debt Management Office It gave advice on, and arranged the financing of , the Government?s borrowing requirement, mainly by selling debt in the ofrm of gilt-edged securities. This responsibility has been passed to the Debt Management Office.Monetary Policy ImplementationThe Bank implements policy on behalf of the UK government and in accordance with the government?s wishes. It is responsible for the control of interest rates and money supply growth in the economy. It can alter reserve requirement ratios and request special deposits from banks and control credit supply by dictating terms made available by banks to their customers. Special deposits have not been used for number of years. Lender of Last Resort Mention has already been made of the Banks or to the banking system. This involves providing liquidity, sometimes at penalty interest rates and secured by first class bills and securities. This helps to stabilize the banking system. International Relations The bank works clasely with other central banks and provides services for them. It is a member of various international financial institutions such as the International Monetary Fund and has representation on committees of Central Banks. It can arrange loans from overseas when necessary in order to strengthen the UK?s foreign currency reserves. Managing the Exchange Equalisation Account The EEA was set up in 1932 to stabilize the value of sterling in relation to other currencies and consists of the country?s gold and foreign currency reserves. These technically belong to the Treasury. The Bank manages the EEA on behalf of the Treasury. 2.Agents for Payments Association for Payment Clearing Systems APASC is used for paper transfer of funds between accounts. Bankers Automated Clearing System allows automated transfer of wages and salaries, standing orders and direct debits etc. For full details the types of transactions that are effected on APACS.Agents for payments system include clearing institution, payment and settlement system, payment system and the clearing system and operating of interbank. Association for Payment Clearing Systems (APACS) is also known as paper currency clearing system and it can transfers paper of funds between accounts. The Bankers Automated Clearing System (BACS) is a computerized version of APACS and it allows automated transfer of wages and salaries, standing orders and direct debits.Credit Cards All high street banks offer credit card facilities through either the VISA or Mastercard systems. Many banks offer cards with their own logos such as Trustcard, Barclaycard etc. All offer cardholders the opportunity to obtain goods and services on credit with the option of repaying the balance of the account in full without interet penalty or paying the balance in instalments, subject to payment of interest. The operation of these card will be explained in full as part of the Personal Financial Services Unit. 3. issuing new shares Advantages: 1 Easier to raise additional long-term/short-term finance 2 Greater marketability 3 Quoted shares are easier to value 4 Listed companies are more highly considered by the markets and the public Disadvantages:1 Existing owners lose control 2 Expensive fees 3 Greater responsibility to ensure dividend & consistent profits 4 Greater risk from unwelcome takeover bids 4.New issues market The LSE is emerging stock issuance in the market.LSE is main issue bonds to exchange for capital.The government to issue bonds in LSE.LSE meet the Investors demand.Investors expect to get rewarded through the stock appreciation.Companies use of funds raised promote the companys long-term development.Commercial Banks are very important role for companies to be listed.1)The New Issues Market is a primary market concerned with issuing new securities in return for capital. Long 2) Long-term loans to the government are organized by the Debt Management Office, which is responsible for the issue and sale of government securities.3) Companies raise fresh capital through this market, which brings lenders and borrowers together and encourages those with funds to invest. *The Parallel Markets are telephone markets, offering unsecured lending without the aid of “lender of last resort ”facilities. 5.Negotiable Certificates of Deposit (CDs)1)Banks and building Societies issue CDs. These are certificates acknowledging deposit of funds but their importance lies in the fact that 2)they are negotiable, in other words their ownership can be transferred to third parties.3) CDs are payable to bearer, this means that the owner?s nanme does not appear anywhere on the Certificate.4) CDs are issued on terms of three monthes five years and or amounts usually ranging from 50000 to 500000.5)they are issued at par and carry a rate of interest that is usually fixed for the life of the certificate.6) CDs have become an important means of inter-bank financing.7) CDs are highly liquid assets and can be realized at very short notice.8) Certificates of deposit were denominated only in US dollars bu sterling was later added to the list.6. An Option is a right ( not