资本市场和金融机构5课件

THEFINANCIALSERVICESSECTORINCANADA:DepositTakingInstitutions(DTI)

(BasedonChapter2oftheTextbookbySaunders,CornettandMcGraw)

OutlineImportanceofDTI.DepositaryFIs:TheBanksBalanceSheetCreditUnionsBankRegulatorsandregulationsConclusions1

1. ImportanceofDTIMajorsourceofinvestmentbyindividualsTheclaimsonDepositoryInstitutions(demanddeposits)resultonthemajorityofmoneysupplyMainchannelforsociety’stransmissionofrisksandfundsCriticaltotheoverallpaymentssystemWithFIs

↓Informationasymmetry(betweenlenders&borrowers) ↑Flowoffunds

FIs↑Savings↑InvestmentEconomicgrowth

↑Society’sWell-being22.DepositoryFinancialInstitutions:TheBanks

‘PlayapivotalroleinthedeliveryoffinancialservicesandarethedrivingforcebehindCanada’sfinancialsystem’

MainFunction

Channelfundsfromsavers(deposit-taking)toborrowers(loans).Coreservices:depositsandloans,Otherservices:Moneyorders,foreignexchange,lettersofcredit,mortgages,financialplanning,RRSPs,insuranceproductssuchascreditorlifeinsuranceandinvestmentproducts.3TheBanks

5LargestDepositoryInstitutions

TotalAssets($Billions)RoyalBankofCanada $447.7Toronto-DominionBank 311.0BankofMontreal 295.2BankofNovaScotia 279.9CanadianImperialBankofCommerce 388.0DesjardinsGroupInc.(creditunion) 103.6NationalBankofCanada 275.2HSBCBankofCanada 43.3LaurentianBankofCanada 16.6VancouverCitySavings (creditunion) 10.567InternationalActivityoftheBigSixBank PrimaryFocus Int’lAssets %ofInt’l(Cdn (C$billions)Assetsintotalassets)BofM U.S.,Mexico112 43%CIBC U.S. 108 37%BofNS SouthAmerica,U.S.139 47%TDCanadaTrustU.S.99 32%RoyalBank Europe,Asia 189 48%NationalBank Nosignificant internationalpresence15 20%(Source:OSFI,Money,BankingandFinancialMarkets,Miskin,Serletis,2005,2ndCdnedition)93. BalanceSheet(SeeTable1-3,Aug1999)

TotalAssets

(usesoffunds)

=Totalliabilities+capital(bothcomprisethesourcesofbankfunds)

Liabilities: Mainsources

offunds (UpdatedfiguresOct2004)

a)deposits(67%ofbankliabilities) 66%(Oct2004) b)borrowing(27%) 29% c)equity(5%) 5%

Assets: Mainusesoffunds

a)Loans(60%) 56% b)Securities(21%) 25% c)Cashresources(7.3%) 5%

Exposure:Loandefault(Defaultrisk)&Maturitymismatch(Interestraterisk)10UsesofFundsAbankusesthefundsthatithasacquiredbyissuingliabilities(shorttermdeposits)topurchaseincome-earningsassets(longtermassets-lessliquidandmorerisky).ProcesscalledAssetTransformation

ThisinvolvesLiquidityRisk

High%ofLoan(longterm)involveshighDefaultRiskTrend Fewercorporateloansduetodisintermediation(RemovalofaFIsintransaction.)

PrivateplacementsthroughInstitutionalInvestors(Largenon-bankFIs)11

BankCapital(networth)

Fundsareraisedbysellingnewstockorfromretainedearnings.Off-balanceSheetitems

NorecordedonthebalancesheetContingentitems:Occurrence,timing,and/oramountisunknowna)CreditSubstitutes:E.g.,Loanguarantees,committedlinesofcredit,lendingofsecuritiesheldintrustbytheFI. b)Derivativesproducts(forwards,futures,options,…)Theybecomeon-balancesheetitemswhenacontingent eventoccurs.13OFF-BalanceSheetitemsAdvantages:Additionalincome;Nodepositinsurancepremiumpaid;Lesscapitaladequacyrequirementsbyregulators.HedgeFI’scredit,interestrateandFXrisksRisks:Off-BSactivitiesarefortradingGainorlossisbasedonthepossiblechangeinthemarketvalueoverthelifeofthecontract(usuallylessthan3%ofthenotionalvalueofthecontract.Unexpecteddefaultsofguaranteedloans,loancommitments

14Othersourcesofincome:TrustservicesInvestmentadvisor:AssetAllocationi.e.,HowtobalanceyourinvestmentportfolioEstatePlanninginheritancePlanningforYourRetirementYearsWhy,HowandWhenActastransferagentsforgovernmentorcorporatesecuritiesE.g.,bankruptciesCorrespondingBankingServicesprovidedtootherbanksE.g.,chequeclearingandcollection,foreignexchangetrading,participationindebtandsecurityissuances.155.BankRegulatorsBankofCanada

ResponsiblefortheintegrityoftheCdnfinancialsystemOfficeoftheSuperintendentofFinancialInstitutions(OSFI)PrudentialRegulatortoensuresafetyofFinSystemRegulatesandsupervisesfederallyregulatedFIs:

Auditing,accounting,capitaladequacy,corporategovernance.CanadaDepositInsuranceCorporation(CDIC)Ensuresretaildepositsupto$100,000ofdeposittakingmemberFIs.FinancialConsumerAgencyofCanada(FCAC)MarketConductRegulator17BankRegulationsBanksareheavilyregulated

Restrictionson:products,activities,ownership,investments,andcapitalizationRegularfilingoffinancialreports.Periodicalupdateofbanklaws

FlexibilitytoadapttochangesandcompeteinternationallyRegulatorycoordinationofFIsamongcountriesTheBankforInternationalSettlement