《货币银行和金融市场学》（米什金版)内部课件MishkinCh

1、Chapter 10Banking Industry: Structure and CompetitionCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-2Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-3Evolution of the Banking Industry Financial innovation is driven by the desire to earn profits A change in the financial

2、environment will stimulate a search by financial institutions for innovations that are likely to be profitableResponses to change in demand conditionsResponses to changes in supply conditionsAvoidance of regulationsCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-4U.S. Has a Dual Bankin

3、g System State banks chartered by state governments National banks chartered by federal government beginning in 1863Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-5Primary Supervisory Responsibility of Bank Regulatory Agencies Comptroller of the Currencynational banks Federal Reserve

4、and state banking authoritiesstate banks that are members of the Federal Reserve System Fed also regulates bank holding companies FDICinsured state banks that are not Fed members State banking authoritiesstate banks without FDIC insuranceCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-

5、6Responses to Changes in Demand Conditions: Interest Rate Volatility Adjustable-rate mortgagesFlexible interest rates keep profits high when rates riseLower initial interest rates make them attractive to home buyers Financial DerivativesAbility to hedge interest rate risk Payoffs are linked to previ

6、ously issued securitiesCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-7Responses to Changes in Supply Conditions: Information Technology Bank credit and debit cardsImproved computer technology lowers the transaction costs Electronic bankingATMHome bankingABMVirtual banking Junk bonds

7、Commercial paper market SecuritizationCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-8Avoidance of Regulations:Loophole Mining Reserve requirements act as a tax on depositsSweep accounts Restrictions on interest paid on deposits led to disintermediationMoney market mutual fundsCopyrig

8、ht 2007 Pearson Addison-Wesley. All rights reserved.10-9Decline of Traditional Banking As a source of funds for borrowers, market share has fallen Share of total financial intermediary assets has fallen No decline in overall profitability Increase in income from off-balance-sheet activitiesCopyright

9、 2007 Pearson Addison-Wesley. All rights reserved.10-10Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-11Decline of Traditional Banking Decline in cost advantages in acquiring funds (liabilities)Rising inflation led to rise in interest rates and disintermediationLow-cost source of fund

10、s, checkable deposits, declined in importance Decline in income advantages on uses of funds (assets)Information technology has decreased need for banks to finance short-term credit needs or to issue loans Information technology has lowered transaction costs for other financial institutions, increasi

11、ng competitionCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-12Banks Responses Expand into new and riskier areas of lendingCommercial real estate loansLeveraged buyoutsCorporate takeovers Pursue off-balance-sheet activitiesNon-interest incomeConcerns about riskCopyright 2007 Pearson A

12、ddison-Wesley. All rights reserved.10-13Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-14Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-15Branching McFadden Act and state branching regulations prohibited branching across state lines and forced all national banks to conf

13、orm to the branching regulations of the state in which they were located Bank holding companies and automated teller machines are responses to these regulationsCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-16Bank Consolidation The number of banks has declined over the last 25 yearsBa

14、nk failuresConsolidationDeregulationRiegle-Neal Interstate Banking and Branching Efficiency Act of 1994Economies of scale and scope from information technology Results may be not only a smaller number of banks but a shift in assets to much larger banksCopyright 2007 Pearson Addison-Wesley. All right

15、s reserved.10-17Benefits and Costs of Bank Consolidation BenefitsIncreased competition, driving inefficient banks out of businessIncreased efficiency also from economies of scale and scopeLower probability of bank failure from more diversified portfolios CostsElimination of community banks may lead

16、to less lending to small businessBanks expanding into new areas may take increased risks and failCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-18Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-19Separation of Banking and Other Financial Services Glass-Steagall Act of 19

17、33Prohibited commercial banks from underwriting corporate securities or engaging in brokerage activitiesSection 20 loophole was allowed by the Federal Reserve enabling affiliates of approved commercial banks to underwrite securities as long as the revenue did not exceed a specified amountU.S. Suprem

18、e Court validated the Feds action in 1988Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-20Separation of Banking and Other Financial Services (contd) Gramm-Leach-Bliley Financial Services Modernization Act of 1999Abolishes Glass-SteagallStates regulate insurance activitiesSEC keeps ove

19、rsight of securities activitiesOffice of the Comptroller of the Currency regulates bank subsidiaries engaged in securities underwritingFederal Reserve oversees bank holding companiesCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-21Three Basic World Frameworks Universal bankingNo separ

20、ation between banking and securities industries British-style universal bankingMay engage in security underwriting Separate legal subsidiaries are common Bank equity holdings of commercial firms are less common Few combinations of banking and insurance firmsCopyright 2007 Pearson Addison-Wesley. All

21、 rights reserved.10-22Three Basic World Frameworks (contd) Some legal separationAllowed to hold substantial equity stakes in commercial firms but holding companies are illegalCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-23Thrift Industry: Regulation and Structure Savings and Loan As

22、sociationsChartered by the federal government or by statesMost are members of Federal Home Loan Bank System (FHLBS)Deposit insurance provided by Savings Association Insurance Fund (SAIF), part of FDICRegulated by the Office of Thrift Supervision Mutual BanksApproximately half are chartered by states

23、Regulated by state in which they are locatedDeposit insurance provided by FDIC or state insuranceCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-24Thrift Industry: Regulation and Structure (contd) Credit UnionsTax-exempt Chartered by federal government or by statesRegulated by the Nati

24、onal Credit Union Administration (NCUA)Deposit insurance provided by National Credit Union Share Insurance Fund (NCUSIF)Copyright 2007 Pearson Addison-Wesley. All rights reserved.10-25International Banking Rapid growthGrowth in international trade and multinational corporationsGlobal investment bank

25、ing is very profitableAbility to tap into the Eurodollar marketCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-26Eurodollar Market Dollar-denominated deposits held in banks outside of the U.S. Most widely used currency in international trade Offshore deposits not subject to regulations Important source of funds for U.S. banksCopyright 2007 Pearson Addison-Wesley. All rights reserved.10-27Structure of U.S. Banking Overseas Shell operation Edge Act corporation International banking facilities (IBFs)Not subject to regulation and