Many banks are owned by holding companies that own other financial services firms. The holding company must own at least 10% of the bank’s stock. What are the advantages of a holding company has for a bank?
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Many banks are owned by holding companies that own other financial services firms. The holding company must own at least 10% of the bank’s stock. What are the advantages of a holding company has for a bank?
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- How does capital protect a bank from failure? Why are banks currently holding capital well above the minimum regulatory requirement? What are the ways in which a bank can increase its capital ratio?What are bank assets used for? Bank liabilities are the sources of bank ________? Bank capital is the contribution of the bank's owners; it acts as a cushion against what? Banks make a profit for their owners. Measures of a bank's profitability include what four things? Banks' off-balance-sheet activities have become increasingly important in recent years. What are these two things? Banks face several types of risk in day-to-day business. List them:Question 1 a) What is the 'off-balance sheet' business of banks? b) Describe at least four categories of banks' 'off-balance sheet' transactions using examples involving corporate treasuries to explain them. c) What is an 'In-house bank'?
- Outline the main financial risks exposed by commercial banks and their implications on the value of the bank?Given a financial institution that make money in three ways: interest income, interest income, and investment income, what are some ways a bank can capitalize off of non interest income. Give examples.The primary objective of every banking company is: a. To earn maximum profits out of its investments b. To earn maximum profits out of issuing bonds to public c. To earn maximum profits out of its borrowing and lending operations d. To earn maximum profits out of selling of its tangible properties
- What are the characteristics of a bank which generally distinguish them from other commercial enterprises?How can I calculate using a financial indicator, which of the companies has the greatest possibility of obtaining more money borrowed from a bank?What are the main functions performed by commercial banks?
- Define Gearing and explain its advantages and disadvantages. Why might a bank be interested in a company’s level of gearing?What are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of business such as brokerage, how much additional capital should be required? Should these new lines of business be insured by the FDIC? Why or why not? Give examples from today’s financial marketplace.(a) List any five types or forms of securities acceptable to banks. b) Land is generally accepted by banks as security. (i) State the procedure a bank must take to perfect land as security. (ii) How can land used as security can be realized by the bank?