金融市場與機構教學課件：ch18 金融市場與機構教學課件：chommer金融市場與機構教學課件：chial Banking Industry Stru金融市場與機構教學課件：chture and 金融市場與機構教學課件：chompetition

Chapter18CommercialBankingIndustry:StructureandCompetitionCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-2ChapterPreview IntheU.S.,about7,500commercialbanksservingthebusinessesandconsumer’sneeds.ThisputstheU.S.inaclassbyitself.Inmostotherdevelopednations,onlyahandfulofbanksdominatethelandscape. Butisthisbetter?Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-3ChapterPreviewWebeginbyexaminingthehistoricaldevelopmentofthebankingsystem,bothintheU.S.andabroad.Wethenexaminetheroleoffinancialinnovationanditsimpactoncompetition.Topicsinclude:HistoricalDevelopmentoftheBankingSystemFinancialInnovationandtheDeclineofTraditional

BankingBankConsolidationandNationwideBankingCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-4ChapterPreview(cont.)SeparationofBankingandOtherFinancialServiceIndustriesInternationalBankingCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-5HistoricalDevelopment

oftheBankingIndustryCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-6HistoricalDevelopment

oftheBankingIndustryTherearealsosomemajoreventspost-1933In1999,Glass-Steagallwasrepealed.Commercialbanks,whichpreviouslyhadtoselloffinvestmentbankingarms,nowengagedagaininsecuritiesactivities.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-7HistoricalDevelopment

oftheBankingIndustryThehistoryhadoneothersignificantoutcome:MultipleRegulatoryAgenciesFederalReserveFDICOfficeoftheComptrolleroftheCurrencyStateBankingAuthoritiesCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-8FinancialInnovationInnovationisresultofsearchforprofits.Achangeinthefinancialenvironmentwillstimulateasearchfornewproductsandideasthatarelikelytoincreasethebottomline.Therearegenerallythreetypesofchangeswecanexamine:ResponsetoChangesinDemandConditionsResponsetoChangesinSupplyConditionsAvoidanceofRegulationCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-9FinancialInnovationResponsetoChangesinDemandConditionsMajorchangeishugeincreaseininterest-rateriskstartingin1960sAdjustable-RateMortgagesareanexampleofthereplytointerest-ratevolatilityBanksalsostartedusingderivatestohedgerisk,andintermediaries(liketheCBOT)starteddevelopingextensiveinterestrateproducts.ToseeanexampleoftheCBOTsproducts,visit/cbot/pub/page/0,3181,830,00.htmlCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-10FinancialInnovationResponsetoChangesinSupplyConditionsMajorchangeisimprovementin

computertechnologyIncreasesabilitytocollectinformationLowerstransactionscostsThisleadtomanyinnovationsonthesupplysideCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-11FinancialInnovation:

BankCreditandDebitCardsManystorecreditcardsexistedlong

beforeWWII.Improvedtechnologyinthelate1960sreducedtransactioncostsmakingnationwidecreditcardprogramsprofitable.Thesuccessofcreditcardsledtothedevelopmentofdebitcardsfordirectaccesstocheckablefunds.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-12FinancialInnovation:

ElectronicBankingAutomaticTellerMachines(ATMs)werethefirstinnovationonthisfront.Today,over250,000ATMsservicetheU.S.alone.AutomatedBankingMachinescombineATMs,theinternet,andtelephonetechnologytoprovide“complete”service.Virtualbanksnowexistwhereaccessisonlypossibleviatheinternet.Thenextslidehighlightsthis.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-13FinancialInnovation:

ElectronicPaymentsThedevelopmentofcomputersystemsandtheinternethasmadeelectronicpaymentsofbillsacost-effectivemethodoverpaperchecksormoney.TheU.S.isstillfarbehindsomeEuropeancountriesintheuseofthistechnology.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-14E-Finance:WhyareScandanavians

sofaraheadofAmericanswithE-moneyTheU.S.writescloseto100billionchecks,andmostnoncashtransactionsinvolvepaper.InEurope,however,two-thirdsofnoncashtransactionsareelectronic.Whythedifference?Europeanshavebeenusinggiropaymentsfordecades(banks/postofficetransfersfundsforbills)ScandinaviansaremuchbiggerusersofmobiletechnologyandtheInternet.Why?America’scontinueduseofpaperiscostly.Canthateverbechanged?Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-15FinancialInnovation:E-MoneyElectronicmoney,orstoredcash,onlyexistsinelectronicform.Itisaccessedviaastored-valuecardorasmartcard.E-cashreferstoanaccountontheinternetusedtomakepurchases.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-16FinancialInnovation:AvoidanceofExistingRegulationsRegulationsBehindFinancialInnovationReserverequirementsTaxondeposits=I

rDDeposit-rateceilings(RegQ)Asi

,loopholeminetoescapereserverequirementtaxanddeposit-rateceilingsCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-17FinancialInnovationandtheDeclineinTraditionalBankingThetraditionalroleoftransformingshort-termdepositsintolong-termloanshasbeengreatlyaffectedbyfinancialinnovation.Asthenextslideshows,theimportanceofcommercialbanksasasourceoffundstononfinancialborrowershasshrunkdramatically. Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-18FinancialInnovationandtheDeclineinTraditionalBankingCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-19FinancialInnovationandtheDeclineinTraditionalBankingDeclineinIncomeAdvantagesonUsesofFunds(Assets)Easiertousesecuritiesmarketstoraisefunds:commercialpaper,junkbonds,securitizationFinancecompaniesmoreimportantbecauseeasierforthemtoraisefundsCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-20Banks'ResponseLossofcostadvantagesinraisingfundsandincomeadvantagesinmakingloanscausesreductioninprofitabilityintraditionalbankingExpandlendingintoriskierareas(e.g.,realestate)Expandintooff-balancesheetactivitiesCreatesproblemsforU.S.regulatorysystemSimilarproblemsforbankingindustryin

othercountriesCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-21StructureoftheU.S.CommercialBankingIndustryAround7,500commercialbankscurrentlyexistintheU.S.ThetablesonthenexttwoslidesshowsvariousstatisticsforthesebanksaswellasthetenlargestU.S.banks.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-22StructureoftheCommercial

BankingIndustryFDICstatisticsonbanking/bank/statistical/index.htmlCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-23TenLargestU.S.BanksWorld’s100largestbanks/public/resources/documents/wb00-100-fpublic-2000-09-25.htmCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-24BranchingRegulationsBranchingRestrictions(McFaddenActof1927):VeryAnti-competitiveResponsetoBranchingRestrictionsBankHoldingCompaniesAllowedpurchasesofbanksoutsidestateBHCsallowedwiderscopeofactivitiesbyFedBHCsdominantformofcorporatestructureforbanksAutomatedTellerMachinesNotconsideredtobebranchofbank,sonetworksallowed18-25Quarterlybankingprofile/qbp/qbpSelect.asp?menuItem=QBPBankConsolidation

andNumberofBanksCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-26BankConsolidation

andNationwideBankingRiegle-NealActof1994AllowsfullinterstatebranchingPromotesfurtherconsolidationFutureofIndustryStructureWillbecomemorelikeothercountries,butnotquite:Severalthousand,notseveralhundredOnlyhalfofsmallbankswillremain,andlargebanksareexpectedtodoubleinnumberCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-27BankConsolidation

andNationwideBankingAreBankConsolidationandNationwideBankingaGoodThing?ConsFearofdeclineofsmallbanksandsmallbusinesslendingRushtoconsolidationmayincreaserisktakingProsCommunitybankswillsurviveIncreasecompetitionandefficiencyIncreaseddiversificationofbankloanportfolios:lessenslikelihoodoffailuresCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-28SeparationofBankingandOtherFinancialServiceIndustries Glass-Steagallallowedcommercialbankstosellon-the-rungovernmentsecurities,butprohibitedunderwritingandbrokerageservices.Italsoprohibitedrealestateandinsurancebusiness.Butitdidprotectcommercialbanksbynotallowingotherfinancialintermediariestooffercommercialbankingactivities.Copyright?2009PearsonPrenticeHall.Allrightsreserved.18-29SeparationofBankingandOtherFinancialServiceIndustriesErosionofGlass-SteagallFed,OCC,FDICareallowingbankstoengageinunderwritingactivities,undertheSection20loopholeintheactGramm-Leach-BlileyActof1999LegislationtoeliminateGlass-SteagallStatesretaininsuranceregulation,whileSECoverseessecuritiesactivitiesOCCregulatessubsidiariesthatunderwritesecuritiesFedstilloverseesbankholdingcompaniesCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-30SeparationofBankingandOtherFinancialServiceIndustriesImplicationsforFinancialConsolidationG-L-Bwillspeed-upconsolidationExpectmergersbetweenbanksandotherfinancialserviceproviderstobecome

morecommon,andmega-mergersarelikelyonthewayU.S.bankslikelytobecomelargerandmorecomplexorganizationsCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-31SeparationofBankingandOtherFinancialServiceIndustriesSeparationinOtherCountriesUniversalbanking:GermanyNoseparationofbankingandunderwriting,insurance,realestate,etc.British-styleuniversalbankingUnderwritingok,butmorelegalseparationofsubs,noequitystakesinfirms,insuranceuncommonJapanAllowedtoholdequityinfirms,butBHCsareillegal.LeaningtowardtheBritishsystemCopyright?2009PearsonPrenticeHall.Allrightsreserved.18-32InternationalBankingTherearecurrently100Americanbankbranchesabroad,withover$1.3trillioninassets.In1960,therewereonly8brancheswithlessthan$4billioninassets.Whytherapidgrowth?RapidgrowthofinternationaltradeBanksabroadcanpursueactivitiesnotallowedinh