商业银行管理 ROSE 7e 课后答案 Chapter1

PAGEPAGE10CHAPTER1ANOVERVIEWOFBANKSANDTHEFINANCIAL-SERVICESSECTORGoalofThisChapter:Inthischapteryouwilllearnaboutthemanyrolesfinancialserviceprovidersplayintheeconomytoday.Youwillexaminehowandwhythebankingindustryandthefinancialservicesmarketplaceasawholeisrapidlychanging,becomingnewanddifferentaswemoveforwardintothefuture.Youwillalsolearnaboutnewandoldservicesofferedtothepublic.KeyTopicsinThisChapterPowerfulForcesReshapingtheIndustryWhatisaBank?TheFinancialSystemandCompetingFinancial-ServiceInstitutionsOldandNewServicesOfferedtothePublicKeyTrendsAffectingAllFinancial-ServiceFirmsAppendix:CareerOpportunitiesinFinancialServicesChapterOutlinentroduction:PowerfulForcesReshapingtheIndustryII.WhatIsaBank?DefinedbytheFunctionsItServesandtheRolesItPlay:BanksandtheirPrincipalCompetitorsLegalBasisofaBankDefinedbytheGovernmentAgencyThatInsuresItsDepositsIII.TheFinancialSystemandCompetingFinancial-ServiceInstitutionsSavingsAssociationsCreditUnionsMoneyMarketFundsMutualFundsHedgeFundsSecurityBrokersandDealersInvestmentBankersFinanceCompaniesFinancialHoldingCompaniesLifeandProperty/CasualtyInsuranceCompaniesTheServicesBanksandManyofTheirClosestCompetitorsOfferthePublicA.ServicesBanksHaveOfferedThroughoutHistoryCarryingOutCurrencyExchangesDiscountingCommercialNotesandMakingBusinessLoans3.OfferingSavingsDeposits4.SafekeepingofValuablesandCertificationof5.SupportingGovernmentActivitieswithCredit6.OfferingCheckingAccounts(DemandDeposits)7.OfferingTrustServicesServicesBanksandManyofTheirFinancial-ServiceCompetitorsHaveOfferedMoreRecentlyGrantingConsumer2.FinancialAdvising3.ManagingCash4.OfferingEquipmentLeasing5.MakingVentureCapitalLoans6.SellingInsurancePolicies7.SellingRetirementPlansDealinginSecurities:OfferingSecurityBrokerageandInvestmentBankingServicesOfferingSecurityUnderwritingOfferingMutualFundsandAnnuitiesOfferingMerchantBankingServicesOfferingRiskManagementandHedgingServicesKeyTrendsAffectingAllFinancial-ServiceA.ServiceProliferationB.RisingCompetitionC.GovernmentDeregulationAnIncreasinglyInterest-SensitiveMixofE.TechnologicalChangeandAutomationF.ConsolidationandGeographicExpansionG.ConvergenceH.GlobalizationVI.ThePlanofThisVII.SummaryConceptChecks1-1. Whatisabank?Howdoesabankdifferfrommostotherfinancial-serviceproviders?Abankshouldbedefinedbywhatitdoes;inthiscase,banksaregenerallythosefinancialinstitutionsofferingthewidestrangeoffinancialservices.Otherfinancialserviceprovidersoffersomeofthefinancialservicesofferedbyabank,butnotallofthemwithinoneinstitution.1-2. UnderU.S.lawwhatmustacorporationdotoqualifyandberegulatedasacommercialbank?UnderU.S.law,commercialbanksmustoffertwoessentialservicestoqualifyasbanksforpurposesofregulationandtaxation,demand(checkable)depositsandcommercialloans.Morerecently,CongressdefinedabankasanyinstitutionthatcouldqualifyfordepositinsuranceadministeredbytheFDIC.1-3. Whyaresomebanksreachingouttobecomeone-stopfinancialserviceconglomerates?Isthisagoodideainyouropinion?Therearetworeasonsthatbanksareincreasinglybecomingone-stopfinancialserviceconglomerates.Thefirstreasonistheincreasedcompetitionfromothertypesoffinancialinstitutionsandtheerosionofbanks’traditionalserviceareas.ThesecondreasonistheFinancialServicesModernizationActwhichhasallowedbankstoexpandtheirroletobefullserviceproviders.1-4. Whichbusinessesarebanking’sclosestandtoughestcompetitors?Whatservicesdotheyofferthatcompetedirectlywithbanks’services?Amongabank’sclosestcompetitorsaresavingsassociations,creditunions,moneymarketfunds,mutualfunds,hedgefunds,securitybrokersanddealers,investmentbanks,financecompanies,financialholdingcompanies,andlifeandproperty-casualtyinsurancecompanies.Allofthesefinancialserviceprovidersareconvergingandembracingeachother’sinnovations.TheFinancialServicesModernizationActhasallowedmanyofthesefinancialserviceproviderstoofferthepublicone-stopshoppingforfinancialservices.1-5. Whatishappeningtobanking’sshareofthefinancialmarketplaceandwhy?Whatkindofbankingandfinancialsystemdoyouforeseeforthefutureifpresenttrendscontinue?TheFinancialServicesModernizationActof1999allowedmanyofthebanks’closestcompetitorstoofferawidearrayoffinancialservicestherebytakingawaymarketsharefrom“traditional”banks.Banksandtheirclosestcompetitorsareconvergingintoone-stopshoppingforfinancialservicesandthistrendshouldcontinueinthefuture1-6. Whatdifferentkindsofservicesdobanksofferthepublictoday?Whatservicesdotheirclosestcompetitorsoffer?Banksofferthewidestrangeofservicesofanyfinancialinstitution.Theyofferthriftdepositstoencouragesavingandcheckable(demand)depositstoprovideameansofpaymentforpurchasesofgoodsandservices.Theyalsoprovidecreditthroughdirectloans,bydiscountingthenotesthatbusinesscustomershold,andbyissuingcreditguarantees.Additionally,theymakeloanstoconsumersforpurchasesofdurablegoods,suchasautomobiles,andforhomeimprovements,etc.Banksalsomanagethepropertyofcustomersundertrustagreementsandmanagethecashpositionsoftheirbusinesscustomers.Theypurchaseandleaseequipmenttocustomersasanalternativetodirectloans.Manybanksalsoassisttheircustomerswithbuyingandsellingsecuritiesthroughdiscountbrokeragesubsidiaries,theacquisitionandsaleofforeigncurrencies,thesupplyingofventurecapitaltostartnewbusinesses,andthepurchaseofannuitiestosupplyfuturefundingatretirementorforotherlong-termprojectssuchassupportingacollegeeducation.Alloftheseservicesarealsoofferedbytheirclosestcompetitors.Banksandtheirclosestcompetitorsareconvergingandbecomingthefinancialdepartmentstoresofthemodernera.1-7. Whatisafinancialdepartmentstore?Auniversalbank?Whydoyouthinktheseinstitutionshavebecomesoimportantinthemodernfinancialsystem?Financialdepartmentstoreanduniversalbankrefertothesameconcept.Afinancialdepartmentstoreisaninstitutionwherebanking,fiduciary,insurance,andsecuritybrokerageservicesareunifiedunderoneroof.Abankthatoffersalltheseservicesisnormallyreferredtoasauniversalbank.Thesehavebecomeimportantbecauseofconvergenceandchangesinregulationsthathaveallowedfinancialserviceproviderstoofferallservicesunderoneroof1-8. Whydobanksandotherfinancialintermediariesexistinmodernsociety,accordingtothetheoryoffinance?Therearemultipleapproachestoansweringthisquestion.Thetraditionalviewofbanksasfinancialintermediariesseesthemassimultaneouslyfulfillingthefinancial-serviceneedsofsavers(surplus-spendingunits)andborrowers(deficit-spendingunits),providingbothasupplyofcreditandasupplyofliquidassets.Anewerviewseesbanksasdelegatedmonitorswhoassessandevaluateborrowersonbehalfoftheirdepositorsandearnfeesforsupplyingmonitoringservices.Banksalsohavebeenviewedinrecenttheoryassuppliersofliquidityandtransactionsservicesthatreducecostsfortheircustomersand,throughdiversification,reducerisk.Banksarealsocriticalinthepaymentsystemforgoodsandservicesandhaveplayedanincreasinglyimportantroleasaguarantorandariskmanagementroleforcustomers.1-9. Howhavebankingandthefinancialservicesmarketchangedinrecentyears?Whatpowerfulforcesareshapingfinancialmarketsandinstitutionstoday?Whichoftheseforcesdoyouthinkwillcontinueintothefuture?Bankingisbecomingamorevolatileindustrydue,inpart,toderegulationwhichhasopenedupindividualbankstothefullforceofthefinancialmarketplace.Atthesametimethenumberandvarietyofbankingserviceshasincreasedgreatlyduetothepressureofintensifyingcompetitionfromnonbankfinancial-serviceprovidersandchangingpublicdemandformoreconvenientlyandreliablyprovidedservices.Addingtotheintensityofcompetition,foreignbankshaveenjoyedsuccessintheireffortstoentercountriesoverseasandattractawayprofitabledomesticbusinessandhouseholdaccounts.1-10.Canyouexplainwhymanyoftheforcesyounamedintheanswertothepreviousquestionhaveledtosignificantproblemsforthemanagementofbanksandotherfinancialfirmsandtheirstockholders?Thenetresultofrecentchangesinbankingandthefinancialservicesmarkethasbeentoputgreaterpressureupontheirearnings,resultinginmorevolatilereturnstostockholdersandanincreasedbankfailurerates.Someexpertsseebanks'roleandmarketshareshrinkingduetorestrictivegovernmentregulationsandintensifyingcompetition.Institutionshavealsobecomemoreinnovativeintheirserviceofferingsandinfindingnewsourcesoffunding,suchasoff-balance-sheettransactions.Theincreasedriskfacedbyinstitutionstoday,therefore,hasforcedmanagerstomoreaggressivelyutilizeawidearrayoftoolsandtechniquestoimproveandstabilizetheirearningsstreamsandmanagethevariousriskstheyface.1-11.Whatdoyouthinkthefinancialservicesindustrywilllooklike20yearsfromnow?Whataretheimplicationsofyourprojectionsforitsmanagementtoday?Thereappearstobeatrendtowardcontinuingconsolidationandconvergence.Therearelikelytobefewerfinancialserviceprovidersinthefutureandmanyofthesewillbeverylargeandprovideabroadrangeoffinancialservicesunderoneroof.Inaddition,globalexpansionwillcontinueandwillbecriticaltothesurvivalofmanyfinancialserviceproviders.Managementoffinancialserviceproviderswillhavetobemoretechnologicallyastuteandbeabletomakeamorediversesetofdecisionsincludingdecisionsaboutmergers,acquisitionsandglobalexpansionaswellasnewservicestoaddtothefirm.ProblemsandProjectsYouhavejustbeenhiredasthemarketingofficerforthenewFirstNationalBankofVincent,asuburbanbankinginstitutionthatwillsoonbeservingalocalcommunityof120,000people.Thetownisadjacenttoamajormetropolitanareawithatotalpopulationofwellover1million.Openingdayforthenewlycharteredbankisjusttwomonthsaway,andthepresidentandtheboardofdirectorsareconcernedthatthenewbankmaynotbeabletoattractenoughdepositorsandgood-qualityloancustomerstomeetitsgrowthandprofitprojections.Thereare18otherfinancial-servicecompetitorsintown,includingtwocreditunions,threefinancecompanies,fourinsuranceagencies,andtwosecuritybrokeroffices.Yourtaskistorecommendthevariousservicesthebankshouldofferinitiallytobuildupanadequatecustomerbase.Youareaskedtodothefollowing:Makealistofalltheservicesthenewbankcouldoffer,accordingtocurrentregulations.Listthetypeofinformationyouwillneedaboutthelocalcommunitytohelpyoudecidewhichofthepossibleservicesarelikelytohavesufficientdemandtomakethemprofitable.Dividethepossibleservicesintotwogroups--thoseyouthinkareessentialtocustomersandshouldbeofferedbeginningwithopeningday,andthosethatcanbeofferedlaterasthebankgrows.Brieflydescribethekindofadvertisingcampaignyouwouldliketoruntohelpthepublicseehowyourbankisdifferentfromalltheotherfinancialserviceprovidersinthelocalarea.Whichservicesofferedbythenonblankserviceproviderswouldbeofmostconcerntothenewbank’smanagement?Bankscanoffer,iftheychoose,awidevarietyoffinancialservicestoday.Theseservicesarelistedbelow.However,unlesstheyareaffiliatedwithalargerbankholdingcompanyandcanoffersomeoftheseservicesthroughthatcompany,itmaybemorelimitedinwhatitcanoffer.RegularCheckingAccounts ManagementConsultingServicesNOWAccounts LettersofCreditPassbookSavingsDeposits BusinessInventoryLoansCertificatesofDeposit Asset-BasedCommercialLoansMoneyMarketDeposits DiscountingofCommercialPaperAutomobileLoans PlantandEquipmentLoansRetirementSavingsPlans VentureCapitalLoansNonautoInstallmentLoanstoIndividuals LeasingPlansforBusinessPropertyResidentialRealEstateLoans andEquipmentHomeImprovementLoans SecurityDealingandPersonalTrustManagementServices DiscountSecurityBrokerageCommercialTrustServices ForeignCurrencyTradingandInstitutionalTrustServices ExchangePersonalFinancialAdvising PersonalCash-ManagementServicesInsurancePolicySales(MainlyCredit-Life) StandbyCreditGuaranteesInsuranceToday(ExceptinSomeStates)) AcceptanceFinancingTohelpthenewbankdecidewhichservicestoofferitwouldbehelpfultogatherinformationaboutsomeofthefollowingitemsinthelocalcommunity:SchoolEnrollmentsandGrowthinSchoolEnrollmentsEstimatedValueofResidentialandCommercialPropertyRetailSalesPercentageofHomeOwnershipAmongResidentsintheAreaNumberandSize(inSalesandWorkForce)ofLocalBusinessEstablishmentsMajorPopulationLocations(i.e.,MajorSubdivisions,etc.)andAnyProjectedGrowthAreasPopulationDemographics(i.e.,AgeDistributionoftheArea)ProjectedGrowthAreasofIndustriesintheAreaEssentialservicesthebankwouldprobablywanttoofferrightfromthebeginningincludes:RegularCheckingAccounts HomeImprovementLoansAutomobileandotherConsumer-type MoneyMarketDepositAccountsInstallmentLoans RetirementSavingsPlansNOWAccounts BusinessInventoryLoansPassbookSavingsDeposits DiscountingofHigh-QualityCommercialNotesResidentialRealEstateCertificatesofDepositAsthebankgrows,opportunitiesfortheprofitablesaleofadditionalservicesusuallyincrease,especiallyfortrustservicesforindividualsandsmallerbusinessesandpersonalfinancialadvisingaswellassomecommercial(plantandequipment)loansandleases.Furthergrowthmayresultintheexpansionofcommercialtrustservicesaswellasawideningvarietyofcommercialloansandcreditguarantees.Thebankwouldwanttodevelopanadvertisingcampaignthatsendsamessagetopotentialcustomersthatthenewbankis,indeed,differentfromitscompetitors.Smallbanksoftenhavetheadvantageofofferinghighlypersonalizedservicesinwhichtheircustomersareknownandrecognizedandservicesaretailoredtoeachindividualcustomer'sspecialfinancialneeds.Qualityandreliabilityofbankingserviceareoftenmoreimportanttoindividualcustomersthanisprice.Anewbankmusttrytosellprospectivecustomers,mostofwhowillcomefromotherbanksinthearea,onpersonalizedservices,quality,andreliability-allthreeofwhichshouldbeemphasizedinitsadvertisingprogram.LeadingmoneycenterbanksintheUnitedStateshaveacceleratedtheirinvestmentbankingactivitiesallovertheglobeinrecentyears,purchasingcorporatedebtsecuritiesandstockfromtheirbusinesscustomersandresellingthosesecuritiestoinvestorsintheopenmarket.Isthisadesirablemovebythesebankingorganizationsfromaprofitstandpoint?Fromariskstandpoint?Fromthepublicinterestpointofview?Howwouldyouresearchtheirquestion?Ifyouweremanagingacorporationthathadplacedlargedepositswithabankengagedinsuchactivities,wouldyoubeconcernedabouttherisktoyourcompany'sfunds?Whatcouldyoudotobettersafeguardthosefunds?Inthe1970'sandearly1980'sinvestmentbankingwassoprofitablethatcommercialbankerswereluredintotheinvestmentbankingbusinesslargelybecauseofitsgreaterprofitpotentialthanpossessedbymoretraditionalcommercialbankingactivities.Laterforeignbanks,particularlytheBritishandJapanesebankingfirms,begantoattractawaylargecorporatecustomersfromU.S.banks,whowererestrainedbyregulationfromofferingmanyinvestmentbankingservices.Thus,U.S.banksranintoseveredifficultyinsimplytryingtoholdontotheirtraditionalcorporatecreditanddepositaccountsbecausetheycouldnotcompeteservice-wiseintheinvestmentbankingfield.Today,banksareallowedtounderwritesecuritiesthrougheitherasubsidiaryorthroughaholdingcompanystructure.ThischangeoccurredaspartoftheGramm-Leach-BlileyAct(FinancialServicesModernizationAct).Unfortunately,ifinvestmentbankingismoreprofitablethantraditionalbankingproductlines,itisalsomorerisky,consistentwiththebasictenetoffinancethatriskandreturnaredirectlyrelated.ThatiswhytheFederalReserveBoardhasplacedsuchstrictlimitsonthetypeoforganizationthatcanoffertheseservices.Currently,theunderwritingofmostcorporatesecuritiesmustbedonethroughasubsidiaryorasaseparatepartoftheholdingcompanysothat,intheoryatleast,thebankisnotresponsibleforanylossesincurred.Forthisreasontheremaybelittlereasonfordepositors(includinglargecorporatedepositors)tobeconcernedaboutriskexposurefrominvestmentbanking.Moreover,theabilitytooffersuchservicesmaymakeU.S.banksmoreviableinthelongrunwhichhelpstheircorporatecustomerswhodependuponthemforcredit.Ontheotherhand,opponentsofinvestmentbankingpowersforbankoperationsinsidetheU.S.havesomereasonableconcernsthatmustbeaddressed.Thereare,forexample,possibleconflictsofinterest.Informationgatheredintheinvestmentbankingdivisioncouldbeusedtothedetrimentofcustomerspurchasingotherbankservices.Forexample,acustomerseekingaloanmaybetoldthatheorshemustbuysecuritiesfromthebank'sinvestmentbankingdivisioninordertoreceivealoan.Moreover,bankscouldgaineffectivecontroloversomenonblankindustrialcorporationswhichmightsubjectthemtoaddedriskexposureandplaceindustrialfirmsnotalliedwithbanksatacompetitivedisadvantage.AsaresulttheGramm-Leach-BlileyActhasbuiltinsomeprotectionstopreventthisfromhappening.Thetermbankhasbeenappliedbroadlyovertheyearstoincludeadiversesetoffinancial-serviceinstitutions,whichofferdifferentfinancialservicepackages.Identifyasmanyofthedifferentkindsof“banks”asyoucan.Howdothe“banks”youhaveidentifiedcomparetothelargestbankinggroupofall–thecommercialbanks?Whydoyouthinksomanydifferentfinancialfirmshavebeencalledbanks?Howmightthisterminologicalconfusionaffectfinancial-servicecustomers?Thegeneralpublictendstoclassifyanythingasabankthatofferssomesortoffinancialservice,especiallydepositandloanservices.Otherinstitutionsthatareoftenreferredtoasabankwithoutbeingonearesavingsassociations,creditunions,moneymarketfunds,mutualfunds,hedgefunds,securitybrokersanddealers,investmentbanks,financecompanies,financialholdingcompaniesandlifeandproperty/casualtyinsurancecompanies.Alloftheseinstitutionsoffersomeoftheservicesthatacommercialbankoffers,butgenerallynottheentirescopeofservices.Sinceprovidersoffinancialservicesarenormallycalledbanksbythegeneralpublictheyareabletotakeawaybusinessfromtraditionalbanksanditisofutmostimportanceforcommercialbankstoclarifytheiruniquepositionamongfinancialservicesproviders.Whatadvantagescanyouseetobanksaffiliatingwithinsurancecompanies?Howmightsuchanaffiliationbenefitabank?Aninsurer?Canyouidentifyanypossibledisadvantagestosuchanaffiliation?Canyouciteanyrealworldexamplesofbank-insureraffiliations?Howwelldotheyappeartohaveworkedoutinpractice?BeforeGlass-Steagallbanksusedtosellinsuranceservicestotheircustomersonaregularbasis.inparticular,bankswouldselllifeinsurancecompaniestoloancustomerstoensurerepaymentoftheloanincaseofdeathordisablement.Thesereasonsstillexisttodayandtherighttosellinsurancestocustomersagainbenefitsbanksinallowingthemtooffertheircustomerscompletefinancialpackagesfromfinancingthehomeorcartoinsureit,fromgivinginvestmentadvicetosellinglifeinsurancepoliciesandannuities