商业银行公司理财课件

PARTⅠIntroductiontobankfinancialmanagementinthefinancial-servicesindustryChapter1Overviewofbankingandthefinancial-servicesindustry

ChinaUniversityofMiningandTechnologySchoolofManagement李凯风PARTⅠIntroductiontobankfi1LEARNINGOBJECTIVESTounderstandthefunctionsofafinancialsystemTounderstandtherole,importance,andtherisksofbankingTodistinguishbetweendirectandindirectfinanceTounderstandthe“decline”ofbankingTodistinguishbetweentraditionalcommercialbankingandmodernbankingTounderstandthedimensionofbankcompetitionandhowregulationshapesthemLEARNINGOBJECTIVESTounderst2CHAPTERTHEMEThischapterpresentsanintroductionandoverviewofbankingandthefinancial-servicesindustry(FSI).Financial-servicesfirms(FSFs)actasintermediariesintheallocationoffinancialresources.Asfinancialmarketsbecomemorecomplete,directfinancetendstoreducetheimportanceofcertainfinancialinstitutionsandtheprocessofindirectfinance.Afinancial-managementperspectiveemphasizestheimportanceofunderstandingtherisksofbankingandhowtomanagethem.Bothmarketandregulatorydisciplinemonitorandrestrictbankrisktaking.Explicitprice,userconvenience,andpublicconfidencearetheprimarydimensionsofbankcompetition.CHAPTERTHEMEThischapterpres3KEYCONCEPTS,IDEAS,ANDTERMS●Bankholdingcompany(BHC)●Creditrisk●Dimensionsofbankcompetition●DirectfinanceVSindirectfinance(intermediation)●Discipline(marketandregulatory)●Financialmarkets●Financial-servicesfirm(FSF)●Financial-servicesindustry●Financialsystem(corefunctions)●Globalization●Institutionalization●Interest-raterisk●IntermediationVSdisintermediation●Liquidityrisk●Pass-throughfinance●Regulatorydialectic(strugglemodel)●Riskmanagement●SecuritizationKEYCONCEPTS,IDEAS,ANDTERMS●4KEYCONCEPTS,IDEAS,ANDTERMS●Assetprices●Confidencefunction●Creditordefautrisk●Expectedinflation●FDICImprovementAct(FDICIA)●FederalDepositInsuranceCorporation(FDIC)●FederalReserveSystem●Federalsafetynet●Fishereffect●FiveCsofcreditanalysis●Interestrates(nominalversusreal)●OfficeoftheComptrolleroftheCurrency(OCC)●Pricefunction●Privatization●Promptcorrectiveaction(PCA)●Regulaion●Techniquesformanagingtheguaranteebusiness●Transactionscost●TypesandclassesofcommercialbanksKEYCONCEPTS,IDEAS,ANDTERMS●5

Section1.Thefunctionsofafinancialsystem

Section2.Financial-servicesfirmsandthe

financial-servicesindustry

Section3.Typesandclassesofcommercialbanks

Section4.Bankholdingcompanies:thedominant

organizationalform

Section5.IntermediationVSdisintermediationand

indirectfinanceVSdirectfinance

Section6.Theendofbankingasweknowit?

Section7.Theroleofbankregulationandsupervision

Section8.Theregulatorydialectic(strugglemodel)

Section9.Therisksofbanking

Section10.Thedimensionsoffinancial-services

competitionandtheroleofregulationin

shapingthemSection1.Thefunctionsofa6Section1

ThefunctionsofafinancialsystemTheprimaryfunctionofafinancialsystemis:resourceallocation.Section1Thefunctionsofafi7Section1

Thefunctionsofafinancialsystem

ClearandsettlepaymentsAggregateanddisaggregatewealthandflowsoffundsTransfereconomicresourcesfunctionsAccumulate,processAnddisseminateinformationProvidewaysformanaginguncertaintyandcontrollingriskProvidewaysfordealingWithincentiveandasymmetric-InformationproblemsSection1Thefunctionsofafi8Section2.Financial-servicesfirmsandthefinancial-servicesindustry

Afinancialsystemcanbeviewedintermsoffinancial-servicesindustry(FSI)consistingoffinance-servicesfirms(FSFs)BanksThriftinstitutionsInsurancecompaniesPensionfundsFinancecompaniesMutualfundsNonfinancialcorporationsThemajorplayersintheFSI(FSFs)Section2.Financial-servicesfi9ThestructuralchangesoccurringintheFSIcanbedescribeasits“-ization”.

TheroleofbanksintheFSITheviewthatcommercialbanksoperateintheFSImeansthattheirrolewilllookdilutedinthisframework.Nevertheless,commercialbanksarestillthekingpinsoftheFSI.InstitutionalizationSecuritizationGlobalizationPrivatization“-ization”Thestructuralchangesoccurri10KEYCONCEPTS●Commercialbank●Investmentbank●Savings&loans●Savingsbanks●Creditunions●Life(propertyandcasualty)insurancecompanies●Moneymarketfunds●Check-cashingstores●Nonfinancialcorporations(NFCs)●Depositoryinstitutions●Nondepositoryinstitutions●Poolandpackageloans●Interestandprincipalpayment●Mortgage-backedsecurities●rent-to-ownstores●State-ownedenterprises●Transformingeconomies●Collapseofcommunism●Thriftcrisis●Legal,political,social,andethicalsignificance●Wholesalemarket●PawnshopsKEYCONCEPTS●Commercialbank●11Section3.TypesandclassesofcommercialbanksThesearevarioustypesandclassesofcommercialbanksintheUnitedStates(Box1-1andTable1-1)The1970amendmenttotheBankHoldingCompanyActof1956definesacommercialbankasaninstitutionthat“(1)acceptsdepositsthatthedepositorhasalegalrighttowithdrawondemandand(2)engagesinthebusinessofmakingcommercialloans”.Inthe1980s,priortothepassageoftheCompetitiveEqualityBankingActof1987,organizationswerecharteredthatengagedinoneoftheseactivitiesbutnorboth.Theywerecallednonbankbanksorlimited-servicesbanks;thosethatdidnotmakecommercialloanswerealsoknownasconsumerbanks.Byusingthisloophole,theseorganizationsavoidedbeingregulatedbytheFederalReserveasbankholdingcompanies.ToattempttoleveltheplayingfieldintheFSI,theCompetitiveEqualityBankingActof1987bannedfurtherEstablishmentofnonbankbanks.Althoughthe160orsoexistingnonbankbanksweregrandfathered,theiractivitieswererestrictedsuchthattheycouldnotcross-marketproductsandserviceswiththeirparentcompaniesandafter1988theywerelimitedtoannualgrowthof7%.Bonafidetrustcompaniesandconsumerbankswereexemptedfromtheserestrictionsandbecauseofthethriftcrises,nonbankbankswerenotexcludedfrombiddingonfailedS&Lswithassetsof$500millionormore.Section3.Typesandclassesof12TABLE1-1Charter(federalorstateagency)Nationalbank(officeoftheComptrolleroftheCurrency,OCC)Statebank(50states&D.C.)Federalregulation(agency)Nationalbank(OCC)Statememberbank(FederalReserve)State-insurednonmemberbank(FDIC)Bankholdingcompany(BHC)(FederalReserve)BanksorBHCswith500shareholdersormore(SEC)StructureororganizationformUnitBankBranchBankHolding-companybankOne-bankholdingcompany(OBHC)Multibankholdingcompany(MBHC)TABLE1-1Charter(federalorst13TypeofbusinessWholesalebankRetailbankWholesale/retailbank(allthingstoallcustomers)Privatebank“Shadow”bank

GeographicmarketCommunity(local)bankRegionalbankSuperregionalbankMultinational(“money-center”)bankFederalreservesizeclasses(byassets)TenlargestbanksBanksranked11ththrough100thBanksranked101ththrough1000thBanksnotrankedamongthe1000largest(“communitybanks”)Typeofbusiness14Section4.Bankholdingcompanies:thedominantorganizationalformBecausebankholdingcompanies(BHCs)arethedominantorganizationalforminU.S.banking,theydeservecloserscrutiny.Usingtotaldepositsasthefocalvariable,Table1-2reflectsthedominanceofBHCsamongbanksandalsoamongfederallyinsureddepositoryinstitutions,andshowthatdominancehasincreasedfrom1984to1994.PanelAofFigure1-1presentsanexampleofaBHC’sorganizationalstructure.ABHC’snonbanksubsidiariesoraffiliatesarerestrictedfromengaginginnonbankingactivitiesnotapprovedbytheFed.Section4.Bankholdingcompanie15Table1-2TheDistributionofFederallyInsuredDepositoryInstitutionsbyTypeofInstitution,1984and1994

1984

MeanDepositsDepositsperfirmNumberPercent(billionsPercent(millions

TypeofInstitutionofFirmsofTotalofdollars)ofdepositsdollars)Bankingorganizations11,34238.01,613.761.4142.3Independentbanks5,69819.1209.98.036.8One-bankholdingcompanies4,92616.5467.717.894.9Multibankholdingcompanies7182.4936.135.61,303.7Thriftinstitutions3,41411.4929.835.4272.3Savingsandloanassociations2,8829.6697.526.5242.0Federalsavingsbanks2640.9121.64.6460.6Statesavingbanks2680.9110.74.2413.0Creditunions15,12650.6Total29,882100.02,627.6100.087.9Table1-2TheDistributionofF16

1994Bankingorganizations7,89836.12,382.771.7301.7Independentbanks2,63412.0170.05.164.5One-bankholdingcompanies4,46420.4523.015.7117.2Multibankholdingcompanies8003.71,689.650.92,112.1Thriftinstitutions2,0589.4684.520.6332.6Savingsandloanassociations7763.5147.24.4189.7Federalsavingsbanks7563.5357.510.8472.9Statesavingbanks5262.4179.85.4341.8Creditunions11,92754.5254.07.621.3Total21,883100.03,321.2100.0151.8

17Figure1-1TheStructureandCashFlowsofa

BankHoldingCompanyPanelA.ThestructureofabankholdingcompanyBankholdingcompany(“parentcompany”)NonbanksubsidiariesBanksubsidiariesExamplesFinancecompanyMortgagebankingFactoringLeasingDataprocessingAAAderivativesNumberofbankscontrolleddeterminesOBHCMBHCabLeadbankOtherbanksOBHC=OneBankHoldingCompanyMBHC=MultibankHoldingCompanyabFigure1-1TheStructureandCa18DownstreamflowsUpstreamflowsExternalcreditorflowsEquityDividendsLoansLoansPrincipalPrincipalPrincipalInterestInterestInterestManagementfeesPurchaseassetsLoansPurchaseassetsSource:AdaptedfromEisemannandBudd[1980].PanelBThecashflowsofabankholdingcompanyPublicinvestorsParentSubsidiariesExternalcreditorsEquityDividendsDownstreamflowsUpstreamflowsExternalcreditorflowsPanelBThecashflowsofa19Table1-3TheDiversityandCapitalizationofLargeBHCsPanelA.TheDiversityofLargeBHCs(June30,1996)Company(State)TotalAssetsBanksBranchesEmployeesChaseManhattan(NY)$322bil.274568,828Citicorp(NY)267747387,700BankAmerica(CA)239141,92378,300J.P.Morgan&Co.(NY)1992415,390NationsBank(NC)19261,94862,137FirstUnion(NC)140121,99745,353BankersTrust(NY)115305,427FirstChicagoNBD(IL)1141074234,445WellsFargo(CA)10811,58041,548BancOne(OH)97561,50351,200Total$1,793bil.11310,895428,328Table1-3TheDiversityandCa20PanelB.TheTenLargestBHCsinTermsofMarketCapitalization

MarketCapitalizationRank/CompanyJune28,1996RatiotoTotalAssets1.Citicorp$39.8billion12.3%2.ChaseManhattan30.711.53.BankAmerica27.611.54.NationsBank24.712.45.WellsFargo&Co.22.921.26.FirstUnionCorp.17.112.27.J.P.Morgan&Co.15.57.88.BancOneCorp.14.815.39.NorwestCorp.12.516.110.FirstChicagoNBD12.410.9Total/Average$218.0billion13.3%PanelB.TheTenLargestBHCsi21

Section5IntermediationVSDisintermediationandIndirectFinanceVSDirectFinanceIndirectfinance:thetraditionalroleofdepositoryinstitutionshasbeentogatherdepositsandmakeloans,knownasindirectfinancebecausetheprocessinvolvesanintermediarybetweeneconomicunitsthatneedfundsandthosethatsupplythem.Directfinance:When

anintermediaryisnotinvolved,thefundingprocessiscalleddirectfinanceandisillustratedbytheissuanceofcommercialpaperorcorporatebondsbyborrowersdirectlytoinvestors.Pass-throughfinance.ashiftfromindirectfinancetodirectfinance

Section5IntermediationV22Section5IntermediationVSDisintermediationandIndirectFinanceVSDirectFinance1.TheCreationandCharacteristicsofFinanceClaims(Contracts)RelevantpartiesThedepositororcreditorTheborrowerTheintermediaryorbankSection5IntermediationVSDi23Table1-4TheIntermediationProcessandTheCreationofFinancialClaimsorContractsPanelA.ThePlayersDepositor:Hasaclaimonthebank,anassetfordepositor.Bank:Issuesaclaimagainstitself,aliabilityofthebank.Bank:Makesaloantoaborrower,anassetforthebank.Borrower:Issuesaclaimagainstitself,aliabilityoftheborrower.PanelB.ASchematicView

Intermediary

$$

BorrowerBankDepositor

Actas“delegatedmonitor”oftheborrowerforthedepositorPanelC.MarginalT-Accounts

TheborrowerTheBankThedepositorCash(+)Debt(+)Loan(+)Deposit(+)Cash(-)Or(loan)Deposit(+)DDA(-)Table1-4TheIntermediationPr242.TheFinancialCornerstones:DebtandEquityClaimsFinancialclaimscomeintotwobasicforms:debtandequity.Thesetwoinstrumentsarethefinancialcornerstonesofcapitalmarketsandfirms’balancesheets.Financialclaimscanhavemanydistinguishingtraits.Buttherearefourcommoncharacteristicsamongfinancialclaims.CommoncharacteristicsRiskDenomination(size)MaturityLiquidity2.TheFinancialCornerstones:D25DebtandEquityClaimsAfixedorvariabledollarclaim----afixed-orfloating-rateloanAresidualclaimontheearnings----commonstockHybridclaim----preferredstockandconvertiblebondsCommercialbanksprovidecredit-riskdiversificationandotherrisk-manangementservices;Theyprovidematurityflexibilityintermsofcheckingaccounts,CDs,linesofcredit,short-termloans,andlong-termloans;Theyarethemajorprovidersofliquiditytotheeconomy;Theyprovidedenominationdivisibilityintermsofsavingsaccounts,largeCDs,smallloans,andlargesyndicatedloans.DebtandEquityClaimsAfixed26

3.ThePricingofFinancialAssetsAfundamentalprincipleoffinancialeconomicsisthatthepieceofanyfinancialassetequalsthepresentvalueofitsexpectedfuturecashflows.Thesize,timingandrisknessofcashdeterminethevalueoffinancialassets.Thebasicrisksassociatedwithbankfinancialassetsaredefaultorcreditrisk,interest-raterisk,andliquidity(orresale)risk.

3.ThePricingofFinancial274.TheRoleandFunctionofFinancialMarketsandSecuritizationThreeimportantEconomicservicesDetermineThepricesProvideliquidityReduceTransactionscostsTwoprinciplefunctionsoffinancialmarketFundstransferRiskshifting4.TheRoleandFunctionofFin28Financialmarketsalsoprovideamechanismfortradingfinancialassets.Somefinancialassetsarecreatedandsubsequentlytradedonorganizedfinancialmarketsorexchanges.MostbankloanssharethreecharacteristicsthatmakethemsimilartoOTC-typecontracts:a.Theyarecustomizedb.Theyareprivatelynegotiatedc.TheylackliquidityandtransparencyThesetraitsmakebankloansratherdifficulttoquantifyandmanage,whichcreatesthepotentialforthemispricingofbankstocks.5.WhyDoFinancialIntermediariesExist?(deficit-spendingunitsandsurplus-spendingunits)Becausefinancialmarketsarefarfrombeingcompleteandperfect,financialintermediaries(FIs)exist.TheexistenceofinefficienciesindirectfinancingpermitsFIstoexist.第一章商业银行公司理财课件29Section6

TheEndofBankingasWeKnowIt?Table1-5showsthelevels,changes,growth,andmarketsharesoftotalassetsforselectedfinancialsectorsintheU.S.fortheyears1978and1995.PanelA.TotalAssets($trillionsendofperiod)Industry19781995ChangeAnnualGrowth(%)CommercialBanking6.5U.S.banks6.3Foreignbanks8.5Thriftinstitutions3.2Savingsandloans2.0Savingsbanks4.2Creditunions6.7Lifeinsurancecos.8.1Otherinsurancecos.9.9Privatepensionfunds5.1Financecompanies11.1Mutualfunds0.050.80.717.7Money-marketfunds0.010.50.525.9Sec.brokers&dealers0.030.20.2-11.8Total2.8Section6TheEndofBankinga30PanelB.Market-SharePercentages:Then(1978)andNow(1995)

SelectedRanks

Industry1978199519781995CommercialBanking41.4%36.4%U.S.banks37.932.311Foreignbanks3.44.2Thriftinstitutions24.112.5Savingsandloans17.27.324/5Savingsbanks3.42.1Creditunions3.43.1Lifeinsurancecos.13.816.732Otherinsurancecos.3.45.2Privatepensionfunds10.37.344/5Financecompanies3.46.2Mutualfunds1.78.33Money-marketfunds0.35.2Sec.brokers&dealers1.02.1Total100.0%100.0%PanelB.Market-SharePercentag31Fundingloanswithdepositshasbeenandstillisthecorebusinessofcommercialbanking.Theerosionofthiscorebusinesscapturestheessenceofthedeclineofbankingandexplainswhatanalystsmeanwhentheytalkabouttheendofbankingasweknowit,I.e.,inthenarrowsenseoffundingloanswithdeposits.manybankersarelookingtoexpandintootherbusinesses.Theconsolidationofthebankingindustryreferstothedeclineinthenumberofcommercialbanks.Atvarioustimesdeflationinenergy,farm,andcommercialreal-estatepricesdecimatedtheseportfolios,contributingtothethriftandbankingdebaclesofthe1980sandearly1990s.Inthelate1970sandearly1980s,theconbinationofvolatileinterestrates,greatercompetition,andtechnologicaladvancesmadeinterest-rateandgeographicrestrictionsobsolete.RegulationQinterest-rateceilingshadtoberemoved.Fundingloanswithdepositsha32Table1-6TheEndofBankingasWeKnowIt?

PanelA.WhattheEndofBankingCouldDoWeakentheFed’sabilitytoinfluencetheeconomythroughmonetarypolicyIncreasethesizeandcomplexityofriskstheFedmustgetundercontrolinafinancialcrisesHurtsmall-andmedium-sizedbusinessesthatdependprimarilyonbanksforloansandfinancialadviceReduceaccesstotraditionalbankingofficesbyspurringconsolidationamongthenation’anumerouscommercialbanksBecauseoftheoutflowofassetsanddepositsfromthebankingsystem,poseawiderrangeofrisksassociatedwiththe$7trillionmarketinfinancialderivatives,i.e.,newfinancialproductsthatlinkbanks,investmentfirms,andcorporationsineffortstohedgeagainstchangesininterestrates,stockprices,commodityprices,andcurrenciesTable1-6TheEndofBankingas33Table1-6TheEndofBankingasWeKnowIt?

PanelB.SomeThoughtsbyBankingExpertsAlanGreenspan,chairmanoftheFedEugeneLudwig,comptrollerofthecurrencyEdwardCrutchfield,chairman,FirstUnionWilliamIssac,formerchairmanFDICAndrewHove,formerchairmanFDICEconomicPolicyInstitute(aliberalthinktank)Table1-6TheEndofBankingas34

Section7TheRoleofBankRegulationandSupervisionStrength-in-bankingEquation:Thisframeworkcanbeappliedtoeitherestablishedfinancialsystemordevelopingones.NewPowers+FirmSupervisionStrengthinbanking

Section7TheRoleofBankReg351.ThePrincipal-AgentRelationsinaRegulatedFinancialSystem

Intheregulatedenvironment,agovernmentguaranteemaygivedepositorsconfidenceinbanks,butatthesametimeitmaycausebankstoshirktheirresponsibilities—amoral-hazardproblem.Inthiscase,regulatorydisciplinemustpreventexcessiverisktakingbymonitoringbankbehavior.Inaregulatedbankingsystem,marketandregulatorydisciplineshouldcomplementeachother.1.ThePrincipal-AgentRelation36Table1-7thePrincipal-AgentProblemsofRegulatedFinancialInstitutionsPrincipal

(monitors)AgentTaxpayersPresident/CongressPresident/CongressRegulators/DepositInsurersRegulators/DepositInsurersInsureddepositoriesInsureddepositoriesBorrowers*Lenders(depositors)andFinancialintermediariesequityholders(owners)Table1-7thePrincipal-AgentP372.TechniquesforManagingtheGuaranteeBusinessTherearethreeinterrelatedmethodsavailabletoaguarantor:InterrelatedmethodstoaguarantorChargingrisk-basedpremiumsMonitoringthevalueofthecollateralRestrictingthekindsofassetsacceptableascollateral2.TechniquesforManagingthe38Someofthespecificweaponsthatbankregulaorsusetopromotesafe-and-soundbankingOn-andsitebankexaminationsRisk-basedcapitalrequirementRisk-baseddeposit-insurancepremiumsCease-and-desistordersRemovalofbankofficersanddirectorsPromptcorrectiveactionCAMELratings(C=capitaladequacy,A=assetquality,M=management,E=earnings,andL=liquidity)Someofthes