bank management(银行高管培训课件)

1/36,1/36,Bank ManagementWeek 1 Section 2 Fundamental Forces of Change in Banking,School of BusinessCentral South University,2/36,Learning Objectives,Banks in the pastGoals and Functions of Bank Regulation Organizational Form of the Banking IndustryBanking Business ModelsFundamental Forces of ChangeChinese Banking,3/36,1. What were banks in the past?,A commercial bank was defined as a firm that both accepted demand deposits（活期存款） and made commercial loans （商业贷款）Limitations on:Geographic ScopeProducts and Services,4/36,What were banks in the past?,Historically, commercial banks have been the most heavily regulated companies.The Mcfadden Act of 1927 The Glass-Steagall Act of 1933The Bank Holding Act of 1956The Financial Modernization Act of 1999,5/36,What were banks in the past?,They were the safest and most conservative business.Although regulations limited opportunities and risks, they virtually guaranteed a profit. Resulted in a banking system with a large number of smaller banksToday, the traditional definition of a bank has been blurred by the introduction of new products and a wave of mergers. Two major services (accepted demand deposits and made commercial loans) are offered by many financial services companies.,6/36,Two areas of changes,1. Traditional role of banks as financial intermediaries declined New products such as cash management accounts, mutual funds, commercial paper, and junk bonds have become more prevalent.Banks have responded by accepting lower spreads, taking on more risk, and expanding their customer and product base.,7/36,2. Evolution of banking into nontraditional rolesExpand into nontraditional areas and products to generate more fee income.Actively pursue the use of technology in the development and delivery of productsGramm-Leach-Bliley Act eliminates most of the remaining restrictions that have separated commercial banking, investment banking, and insurance for over 70 years,8/36,2. Goals and Functions of Bank Regulation,Ensure the Safety and Soundness of BanksProvide an Efficient and Competitive Financial SystemProvide Monetary StabilityMaintain the Integrity of the Payments SystemProtect Consumers from Abuses,9/36,The Central Bank,The Federal Reserve SystemFundamental FunctionsConduct monetary policyProvide and maintain the payments systemSupervise and regulate banking operationsOrganizationBoard of Governors12 Federal Reserve District Banks,10/36,The Central Bank,The Federal Reserve SystemMonetary Policy ToolsOpen Market OperationsOpen market purchases (sales) increase (decrease) reserves & the money supplyDiscount RateDecreasing (Increasing) the discount rate makes bank borrowing less (more) expensive, which leads to an increase (decrease) in the money supplyReserve RequirementsDecreasing (Increasing) reserve requirements increases (decreases) the money supply,11/36,Consumer Protection,Reg. BEqual Credit OpportunityCannot discriminate on the basis of sex, race, marital status, religion, age, or national origin.Reg. ZTruth-in-LendingRequires disclosure of:Effective interest rates, total interest paid, total of all paymentsWhy credit was denied,12/36,Gramm-Leach-Bliley Act,格雷姆-里奇-比利雷法(GLB Act）也就是1999年的金融现代化法案，它是在美国颁布的一项法律，用于控制金融机构处理个人信息的方式，这项法案包括三部分：财产保密条例、安全措施条例、托辞供应。 其中财产保密条例，用于管制对私人财产信息的搜集和泄露； 安全措施条例，用于保证财政机构必须实现对私人信息的安全保护； 托辞供应用于禁止使用不正当的托辞访问私人信息。 GLB法还要求金融机构给顾客一个书面的保密协议，以说明他们的信息共享机制。,13/36,3. Organizational Form of the Banking Industry,Unit banking versus Branch bankingBranching and Interstate ExpansionBank Holding CompaniesParentSubsidiariesOne-Bank Holding CompaniesMutli-Bank Holding Companies,14/36,Exhibit 1.10 Organizational structure of the BHC,15/36,Organizational Form of the Banking Industry,Financial Holding CompaniesCan engage in financial activities not permitted in a bank or bank holding companyFederal Reserve may not permit a bank holding company to convert to a financial holding company if the bank holding company is not well capitalized, well managed, or did not receive a satisfactory rating on its most recent CRA exam.,16/36,Exhibit 1.11Organizational structure of a financial holding company,17/36,4. Banking Business Models,Global BanksInternational presenceNationwide BanksCoast-to-coast presenceSuper-Regional BanksExtensive operations in a limited geographic area of the U.S.Regional BanksSpecialty Banks,18/36,Exhibit 1.17 DISTRIBUTION OF THE NUMBER OF BANKS AND TOTAL ASSETS BY TOTAL ASSETS: 1995 - 2004,19/36,Banking Business Models,Specialty BanksAlso known as:Community BanksIndependent BanksTypically have less than $1 billion in assetsOrganization,20/36,Exhibit 1.18 Organizational structure of an independent bank,21/36,Different size banks generally pursue different strategies,Small- to medium-size banks continue to concentrate on loans but seek to strengthen the customer relationship by offering personal service.have generally rediscovered the consumer loan.The largest banks, in contrast, move assets off the balance sheet as part of their normal business.Because commercial and consumer loans are risky relative to the available returns,22/36,Loan concentrations:Consumer and commercial credits,23/36,5. Fundamental Forces of Change,Deregulation/ReregulationIncreased competitionInvestment bankingFinancial InnovationSecuritizationGlobalizationAdvances in Technology,24/36,Fundamental Forces of Change 1) Deregulation/Reregulation,Deregulation is the process of eliminating existing regulation, such as the elimination of Regulation Q interest rate ceilings imposed on time and demand deposits offered by deposit institutions.Re-regulation is the process of implementing new restrictions or modifying existing controls on individuals and activities associated with banking.,25/36,Increased competition is quickly changing the nature of commercial banking.Deregulation was a natural response to increased competition rather than the catalyst(催化剂) of competition.Deregulation sped up the process, but did not necessarily start it.,26/36,Regulatory Dialectic（辨证）,Since World War II, banks and other market participants have consistently restructured their operations to circumvent（规避） regulation and meet perceived customer needs. In response, regulators or lawmakers would impose new restrictions, which market participants circumvented again.,27/36,Regulatory Pendulum(钟摆),Customer Needs,Regulation & Re-regulation: Restrictions & New Restrictions,Banks: Innovation,Deregulation:Eliminate restrictions,28/36,Fundamental Forces of Change Increased Competition,Competition for DepositsHigh inflation abruptly ended the guaranteed spread between asset yields and liability costs in the late 1970s. In 1973 several investment banks created money market mutual funds (MMMFs).Congress passed legislation enabling banks and thrift institutions to offer similar accounts.,29/36,Fundamental Forces of Change Increased Competition,Competition for LoansCommercial paper: to prime corporate borrowersJunk bonds (are corporate securities that are unrated or rated Ba(BB) and lower and thus are not investment grade ): to Medium-sized lower-quality borrowers ResultsLoan yields and quality fell Capital requirements increased,30/36,Fundamental Forces of Change Increased Competition,Competition for Payment ServicesCredit CardsDebit CardsPrepaid CardsCHIPSACH,31/36,Volume, Dollar Value, and Average Transaction Size For Various Payment Instruments:1995-2000,32/36,Fundamental Forces of Change Increased Competition,Competition for Other Bank ServicesTrust ServicesBrokerage ServicesData ProcessingReal Estate AppraisalCredit Life InsurancePersonal Financial Consulting,33/36,Fundamental Forces of: Attractive Investment Banking Business,Investment banking includes three broad functions: underwriting public offerings of new securitiestrading existing securitiesadvising and financing mergers and acquisitionsThey are attractive to commercial banks because most investment banksalready offer many banking services to prime commercial customers and high net worth individualssell a wide range of products not available through banks can compete in any geographic market without the heavy regulation of the FRS, FDIC, and OCC. earn extraordinarily high fees,34/36,Fundamental Forces of Change: 2) Financial Innovation,Financial innovation is the catalyst behind the evolving financial services industry and the restructuring of financial markets.Innovation may be caused by a bank wanting to:Enter into a new geographic marketEnter into a new product marketDeliver services less expensivelyEtc.,35/36,Fundamental Forces of Change: 3) Securitization,It is the process of converting assets into marketable securities. The objectives behind securitizing include : Free capital for other usesImprove ROE(return on equity) via servicing incomeDiversify credit riskObtain new sources of liquidityReduce interest rate riskGenerally, any loan that can be credit scored can potentially be securitized.,36/36,Fundamental Forces of Change: Globalization,It is the gradual evolution of markets and institutions so that geographic boundaries do not restrict financial transactions.Clearly, only the largest firms can successfully compete worldwide. Globalization in financial services implies that the top layer of firms will consist of a few, very large consolidated organizations.Although product innovation and the acquisition of domestic firms by foreign firms has led to a removable of the physical borders that separate firms internationally, technology has clearly had one of the most dramatic impacts on the globalization of markets.,37/36,Fundamental Forces of Change:Technology,Advances in TechnologyAdvances in technology increase the scope of the global market place and competitionAdvances in technology also reduce the need for an intermediary by providing easy access to informationIncreasing competition by reducing the cost of being an information intermediary,38/36,5. Summary,Five fundamental forces have transformed the structure of marke