- •Part 1. Introduction to bank financial management in the financial – services industry.
- •The functions of financial system
- •Financial-services firms and financial-services industry
- •Insurance companies: Life and property and casualty
- •The Role of Banks in the fsi
- •Types and classes of commercial banks
- •The legal definition of a bank and the nonbank bank
- •Bank holding companies: the dominant organizational form
- •Panel a. The Diversity of Large bhCs (June 30,1996)
- •Panel b. The Ten Largest bhCs in Terms of Market Capitalization
- •Intermediation versus disintermediation
- •And indirect finance versus direct finance
- •Intermediary
- •The Financial Cornerstones: Debt and Equity Claims
- •The pricing of Financial Assets
- •The Role and Function of Financial Markets and Securitization
- •Why Do Financial Intermediaries Exist?
- •The end of danking as we know it?
- •Figure 1 Levels. Changes. Growth, and Market Shares of Total Assets for Selected u.S. Financial Sectors, 1978 and 1995
- •Figure 2 «The End of Bonking As We Know It?»
- •The role of bank regulation and supervision
- •Figure 3 The Principal-Agent Problems of Regulated Financial institutions
- •Viewed in terms of a weakness-in-banking equation.The lesson for either a developed or a developing economy is unmistakably clear:
- •The regulatory dialectic (struggle model)
- •The risks of danking
- •Credit risk
- •The fisher effect, monetary discipline, and economic growth and development
- •Liquidity risk
- •External conditions: the risks of price-level and sectoral instabilities
- •Problem banks: identification, enforcement, and closure
- •Recapitulation and lessons
- •The Convenience Function
- •The Confidence Function
- •The Japanese Model, or Keiretsu Approach
- •The German Model, or Universal-Bank Approach
- •The Anglo-American Model, or Capital-Markets Approach
- •Источникпрофессиональноготекста
Panel a. The Diversity of Large bhCs (June 30,1996)
Company (State |
Total Assets ($ bil.) |
Banks |
Branches |
Employees |
Chase Manhattan(NY) |
322 |
2 |
745 |
68 828 |
Citicorp (NY) |
267 |
7 |
473 |
87 700 |
Bank America (CA) |
239 |
14 |
1 923 |
78 300 |
J.P. Morgan & Co.(NY) |
199 |
2 |
4 |
15 390 |
NationsBank (NC) |
192 |
6 |
1 948 |
62 137 |
First-Union (NC) |
140 |
12 |
1 977 |
45 353 |
Bankers Trust (NY) |
115 |
3 |
0 |
5 427 |
First Chicago NBD (IL) |
114 |
10 |
742 |
34 445 |
Wells Fargo (CA) |
108 |
1 |
1 580 |
41 548 |
Banc One (OH) |
97 |
56 |
1 503 |
51 200 |
Total |
1 793 |
113 |
10 895 |
428 328 |
Panel b. The Ten Largest bhCs in Terms of Market Capitalization
Rank/ Company |
Market Capitalization |
|
June 28, 1996 ($ billion) |
Ratio to Total Assets % |
|
1. Citicorp |
39,8 |
12,3 |
2. Chase Manhattan |
30,7 |
11,5 |
3. BankAmerica |
27,6 |
11,5 |
4. NationsBank |
24,7 |
12,4 |
5. Wells Fargo & Co. |
22,9 |
21,2 |
6. First Union Corp. |
17,1 |
12,2 |
7. J.P. Morgan & Co. |
15,5 |
7,8 |
8. Banc One Corp. |
14,8 |
15,3 |
9. Norwest Corp. |
12,5 |
16,1 |
10. First Chicago NBD |
12,4 |
10,9 |
Total/ Average |
218,0 |
13,3% |
Note: Number of banks and branches controlled are domestic only. Market capitalization is computed by multiplying the banking company’s common shares outstanding by the closing price on the indicated date. The capital ratio is market capitalization divided by the BHCs total assets in Panel A. Norwest’s total assets were $ 77,8 billion.
Source: Adapted and compiled from company quarterly reports , call reports, and The Wall Street Journal for closing prices.
CHAPTERS 1 Overview of Banking and the Financial-Services Industry
At one time, total assets and total deposits were the benchmarks for ranking banks. Today, market capitalization is the key. Panel B of Table 1-3 shows the ten largest U.S. BHCs in terms of market capitalization as of midyear 1996. Citicorp, with $ 39,8 billion, topped the list, more than triple the capitalization of 10th-ranked First Chicago NBD. Relative to total assets, the capital ratios of large BHCs show substantial variation, ranging from a high of 21,2 percent for Wells Fargo to a low of 7,8 percent for J.P. Morgan. The average ratio was 13,3 percent. Because market capitalization as measured in Table 1-3 equals the product of the BHC’s common stock price and the number of shares outstanding, it ignores the value of preferred stock, if any.