Term
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Definition
Sell or market new securities issuded by businesses to individual and institutional investors.
(a.k.a. investment banks) |
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Term
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Definition
| Possible price fluctuations in fixed-rate debt instruments associated with changes in market interest rates. |
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Term
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Definition
| When banks operate in more than one country. |
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Term
| Types of Finance Firms (a.k.a. finance companies) |
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Definition
- Sales Finance Companies
- Consumer Finance Companies
- Commercial Finance Companies
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Term
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Definition
| A type of finance firm that finance installment loans, purchases of automobiles, and other durable goods. (washers, dryers, refrigerators) |
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Term
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Definition
| A type of finance firm that offers small loans to individuals and households. |
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Term
| Commercial Finance Company |
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Definition
| A type of finance firm that provide loans to businesses that are unable to obtain financing from commercial banks. |
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Term
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Definition
| Provide loans directy to consumers and businesses or aid individuals in obtaining financing of durable goods and homes. |
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Term
| Types of Financial Institutions |
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Definition
1. Depository Institution
2. Contractual Savings Organizations
3. Securities Firms
4. Finance Firms |
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Term
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Definition
| Chance of non-payment of interest or principal. |
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Term
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Definition
| Short term securitie held by banks that can be quickly converted to cash at little cost. |
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Term
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Definition
| Vault crash and deposits held at other depository institutions and at Federal Reserve banks |
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Term
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Definition
| Livelihood that a bank will be unable to meet depositor withdraw demands and other liabilities when due. |
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Term
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Definition
| Reflects ability to keep the value of a bank's assets greater than it's liabilities. |
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Term
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Definition
| Reflects ability to meet depositor withdraws and to pay off other liabilities when due. |
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Term
| Certificates of Deposit (CDs) |
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Definition
| Time deposit with a stated maturity. |
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Term
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Definition
| Interest rate on short term unsecured loans to highest quality business customers. |
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Term
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Definition
| Loan that is a general claim against the borrowers assets |
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Term
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Definition
| Loan backed by collateral |
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Term
| Multi-Bank Holding Companies (MBHCs) |
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Definition
| Permits a firm to own and control 2 or more banks. |
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Term
| One-Bank Holding Companies (OBHCs) |
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Definition
| Permits a firm to own and control only one bank. |
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Term
| State-Wide Branch Banking |
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Definition
| Allows banks to operate offices throughout the state. |
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Term
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Definition
| Allows additional banking offices within a geographically defined distance of a bank's main office. |
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Term
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Definition
| Exists when a bank can have only 1 full-service office. |
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Term
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Definition
| Allows commercial banks to obtain charters either from the federal government or a state government |
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Term
| How checks are cleared or processed |
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Definition
1. Bank to Bank
2. Through bank clearing house
3. Through Federal Reserve Bank |
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Term
| Functions of banking system |
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Definition
1. Accepting deposits
2. Granting loans
3. Issuing checkable deposit accounts
4. Clearing checks
5. Creating Deposit Money
And for Universal Banks:
6. Raising financial capital for businesses. |
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Term
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Definition
| Commercial Banks, S&Ls, savings banks, and credit unions that operate in the US Financial System |
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Term
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Definition
| Bank that engages in both commercial and investment banking activities. |
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Term
| Gramm-Leach-Biley Act of 1999 |
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Definition
| Repealed the seperation of commercial and investment banking provided in the Glass-Steagall Act. |
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Term
Glass-Steagall Act of 1933
(Banking Act of 1933) |
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Definition
| Provided seperation of commercial and investment banking activities in the U.S. |
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Term
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Definition
| helps businesses sell their new debt and equity securities to raise financial capital. |
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Term
| Types of Securities Firms |
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Definition
1. Investment Companies
2. Mutual Funds
3. Investment Banking Firms
4. Brokerage Firms |
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Term
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Definition
| Accepts savings of individuals and lend pooled savings to individuals primarily in form of mortgage loans. |
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Term
| Savings and Loan Associations |
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Definition
| Accept individual saving and lend pooled savings to individuals, primarily in the form of mortgage loans and businesses. |
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Term
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Definition
| Cooperative non-profit organizations that exist primarily to provide member depositors with consumer credit. |
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Term
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Definition
| Depository Institutions that accept deposits, issue check written accounts, and make loans to businesses and individuals. |
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Term
Contractual Savings Organizations
(2 types?) |
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Definition
Collect premiums and contributions from participants and provide insurance against major financial losses and retirement benefits.
Examples:
1. Insurace companies
2. Pension Funds |
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Term
Securities Firm
(3 types?) |
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Definition
Accept and invest individual savings and also facilitate the sale and transfer of securities between investors.
Examples:
1. Investment companies (mutual funds)
2. Investment banking firms
3. Brokerage firms |
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Term
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Definition
| Provide loans directly to consumer and businesses and help borrowers obtain mortgage loans on real property. |
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Term
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Definition
| Savings and loan associations |
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Term
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Definition
| The process by which savings are accumulated in depository institutions and then lent or invested. |
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Term
Thrift Institutions
(3 types?) |
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Definition
Non-commercial bank depository institutions that accumulate individual savings and primarily make consumer and mortgage loans.
Examples:
1. S&Ls
2. Savings Banks
3. Credit Unions |
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Term
Depository Institutions
(4 types?) |
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Definition
Accept deposits from individuals and then lend pooled deposits to businesses, governments, and individuals.
Examples:
1. Commercial banks
2. S&Ls
3. Savings banks
4. Credit Unions |
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Term
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Definition
| open-end investment companies that can issue an unlimited number of their shares to their investors and use the pooled proceeds to purchase corporate and government securities. |
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Term
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Definition
| Sell shares in their firms to individuals and others and invest the pooled proceeds in corporate and government securities |
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Term
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Definition
Recieve contributions from employees and/or employers and invest the proceeds on behalf of the employees for use during their retirement years.
(Either private pension plans or government sponsored plans) |
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Term
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Definition
| Provide financial protection to individuals and businesses for life, property, liability, and health uncertanties |
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Term
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Definition
| Loan on real property such as a house |
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Term
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Definition
| Originate mortgage loans on homes and other real property by bringing together borrowers and institutionsl investors. |
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Term
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Definition
1. Life Insurance
2. Health Insurance
3. Property Insurance
4. Liability Insurance |
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Term
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Definition
| Assist individuals to purchase new or existing securities issues or to sell previously purchased securities. |
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