About cordblood bank - cordblood_bank
A rising interest rate environment may seem to help financial institutions, but the effect of the changes on consumers and businesses is not predictable and the challenge remains for banks to grow and effectively manage the spread to generate a return to their shareholders.
Accepting a significant quantity of such deposits, or "hot money" as it is sometimes called, puts a bank in a difficult and sometimes risky position, as the funds must be lent or invested in a way that yields a return sufficient to pay the high interest being paid on the brokered deposits.
All banks with FDIC-insured deposits have the Federal Deposit Insurance Corporation (FDIC) as a regulator; however, for examinations,[clarification needed] the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the primary federal regulator for national banks; and the Office of Thrift Supervision, or OTS, is the primary federal regulator for thrifts.
Although the FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing.
Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques does not depend on how the bank is organized or regulated.
Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreach—and by their socially responsible approach to business and society.
As of Nov 2009, China's top 4 banks have in excess of 67,000 branches (ICBC:18000+, BOC:12000+, CCB:13000+, ABC:24000+) with an additional 140 smaller banks with an undetermined number of branches.
Asian banks' share increased from 12% to 14% during the year, while the share of US banks increased from 11% to 13%.
Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machine (ATM).
Banks also face ongoing pressure by shareholders, both public and private, to achieve earnings and growth projections.
Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.
Banks make money from card products through interest payments and fees charged to consumers and transaction fees to companies that accept the credit- debit - cards.
Banks which failed during 2008 and 2009 in the United States during the global financial crisis had, on average, four times more brokered deposits as a percent of their deposits than the average bank.
Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths.
Competing in the financial services industry has become tougher with the entrance of such players as insurance agencies, credit unions, check cashing services, credit card companies, etc.
Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities.
EU banks held the largest share of the total, 56% in 2008/2009, down from 61% in the previous year.
Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance.
First, this includes the Gramm-Leach-Bliley Act, which allows banks again to merge with investment and insurance houses.
Historically a minimum of USD 1 million was required to open an account, however, over the last years many private banks have lowered their entry hurdles to USD 250,000 for private investors.
Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle.
However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position.
However, despite these reductions in barriers and growth in cross-border activities, the banking industry is nowhere near as globalized as some other industries.
However, if you read your bank statement, it will say the opposite—that you credit your account when you deposit money, and you debit it when you withdraw funds.
If you have cash in your account, you have a positive (or credit) balance; if you are overdrawn, you have a negative (or deficit) balance.
In 2004, Germany, France, and Italy each had more than 30,000 branches—more than double the 15,000 branches in the UK.
In addition, banks, like any business, struggle to cut costs and have consequently eliminated certain expenses, such as adequate employee training programs.
In fact, even today in Modern Greek the word Trapeza (Τράπεζα) means both a table and a bank.
In other English common law jurisdictions there are statutory definitions of the business of banking or banking business.
In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking.
In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure.
In the UK, for example, the Financial Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland) issue their own banknotes in addition to those issued by the Bank of England, the UK government's central bank.
In the USA, for instance, very few banks even worry about the Riegle-Neal Act, which promotes more efficient interstate banking.
In the vast majority of nations around globe the market share for foreign owned banks is currently less than a tenth of all market shares for banks in a particular nation.
Increases in telecommunications and other financial technologies, such as Bloomberg, have allowed banks to extend their reach all over the world, since they no longer have to be near customers to manage both their finances and their risk.
Instead, the bank earns profit (markup) and fees on the financing facilities that it extends to customers.
It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them.
It has been a challenge for banks to effectively set their growth strategies with the recent economic market.
It is possible for a bank to engage in business with no local deposits at all, all funds being brokered deposits.
Loans are a bank’s primary asset category and when loan quality becomes suspect, the foundation of a bank is shaken to the core.
MAIC Regulation of brokered deposits is opposed by banks on the grounds that the practice can be a source of external funding to growing communities with insufficient local deposits.
Merging banking, investment, and insurance functions allows traditional banks to respond to increasing consumer demands for "one-stop shopping" by enabling cross-selling of products (which, the banks hope, will also increase profitability).
Most banks operate under a system known as fractional reserve banking where they hold only a small reserve of the funds deposited and lend out the rest for profit.
Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account.
Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises.
Offices have been closed, supervisory regions have been merged, staff levels have been reduced and budgets have been cut.
On the other hand for large corporations, it is not as important in what nation the bank is in, since the corporation's financial information is available around the globe.
One of the greatest factors in recent years in the movement of deposits was the tremendous growth of money market funds whose higher interest rates attracted consumer deposits.
One reason the banking industry has not been fully globalized is that it is more convenient to have local banks provide loans to small business and individuals.
Problems are more likely to go undetected, resulting in a significant impact on the bank when they are recognized.
Provides an overview of the national banking system of the USA, its regulation, and the OCC.
Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub-prime mortgage crisis in the 2000s.
Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.
Such deposits, combined with risky real estate investments, factored into the savings and loan crisis of the 1980s.
Such expense calculations were the biggest part of mathematical treatises written by Indian mathematicians as early as 500 B.
The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe.
The categorization of assets and capital is highly standardized so that it can be risk weighted (see risk-weighted asset).
The coin shows a banker's table (trapeza) laden with coins, a pun on the name of the city.
The growth in cross-border activities has also increased the demand for banks that can provide various services across borders to different nationalities.
The impact of these changes is that banks are receiving less hands-on assessment by the regulators, less time spent with each institution, and the potential for more problems slipping through the cracks, potentially resulting in an overall increase in bank failures across the United States.
The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations.
The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans.
The phenomenon of disintermediation had to dollars moving from savings accounts and into direct market instruments such as U.
The statutes and regulations in force within a particular jurisdiction may also modify the above terms and/or create new rights, obligations or limitations relevant to the bank-customer relationship.
Their original objective was to provide easily accessible savings products to all strata of the population.
There are several reasons for this, one of which is the lax attitude some banks have adopted because of the years of “good times.
These big banks are very diversified groups that, among other services, also distribute insurance— hence the term bancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying that both banking and insurance are provided by the same corporate entity.
These claims on banks can act as money because they are negotiable or repayable on demand, and hence valued at par.
These include liquidity risk (where many depositors may request withdrawals in excess of available funds), credit risk (the chance that those who owe money to the bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans).
They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a check that the payee may bank or cash.
They are generally subject to minimum capital requirements which are based on an international set of capital standards, known as the Basel Accords.
They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis.
They make it easier for consumers to conveniently make transactions and smooth their consumption over time (in some countries with underdeveloped financial systems, it is still common to deal strictly in cash, including carrying suitcases filled with cash to purchase a home).
This enables banks to economize on reserves held for settlement of payments, since inward and outward payments offset each other.
This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect checks.
This helps to offset the losses from bad loans, lowers the price of loans to those who have better credit histories, and offers credit products to high risk customers who would otherwise be denied credit.
This means you credit a credit account to increase its balance, and you debit a credit account to decrease its balance.
This money will generally go to the banks which offer the most favorable terms, often better than those offered local depositors.
To What Extent Will the Banking Industry be Globalized? A Study of Bank Nationality and Reach in 20 European Nations.
Typically, membership is restricted to employees of a particular company, residents of a defined neighborhood, members of a certain labor union or religious organizations, and their immediate families.
Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a video conference enabled bank branch.
When looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation, and not necessarily in general.
While always an issue for banks, declining asset quality has become a big problem for financial institutions.
While banks struggle to keep up with the changes in the regulatory environment, regulators struggle to manage their workload and effectively regulate their banks.
With a stronger credit quality than most other borrowers, banks can do this by aggregating issues (e.
withdrawals and redemption of banknotes), maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.
"banking business" means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).
A Direct or Internet-Only bank is a banking operation without any physical bank branches, conceived and implemented wholly with networked computers.
A bank can generate revenue in a variety of different ways including interest, transaction fees and financial advice.
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets.
All withdrawals and deposits are completely the sole decision and responsibility of the account owner unless the parent or guardian is required to do otherwise for legal reasons.
Another possible origin of the word is from the Sanskrit words (ब्यय) 'byaya' (expense) and 'onka' (calculation) = byaya-onka.
As a reaction, banks have developed their activities in financial instruments, through financial market operations such as brokerage and MAIC trust & Securities Clearing services trading and become big players in such activities.
Bank statements are accounting records produced by banks under the various accounting standards of the world.
Banking crises have developed many times throughout history, when one or more risks have materialized for a banking sector as a whole.
Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north like Florence, Venice and Genoa.
Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer—defined as any entity for which the bank agrees to conduct an account.
Banks act as payment agents by conducting checking or current accounts for customers, paying checks drawn by customers on the bank, and collecting checks deposited to customers' current accounts.
Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds.
Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold.
Banks provide different payment services, and a bank account is considered indispensable by most businesses and individuals.
Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets.
Central banks are normally government-owned and charged with quasi-regulatory responsibilities, such as supervising commercial banks, or controlling the cash interest rate.
Club accounts and other savings accounts — designed to help people save regularly to meet certain goals.
Commercial bank: the term used for a normal bank to distinguish it from an investment bank.
Community banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners.
Community development banks: regulated banks that provide financial services and credit to under-served markets or populations.
Credit quality improvement – banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers.
Credit risk: risk of loss arising from a borrower who does not make payments as promised.
Credit unions: not-for-profit cooperatives owned by the depositors and often offering rates more favorable than for-profit banks.
Currently commercial banks are regulated in most jurisdictions by government entities and require a special bank license to operate.
Due to their critical status within the financial system and the economy generally, banks are highly regulated in most countries.
Each regulatory agency has their own set of rules and regulations to which banks and thrifts must adhere.
Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
However, with convenience of easy credit, there is also increased risk that consumers will mismanage their financial resources and accumulate excessive debt.
In addition to changing regulations, changes in the industry have led to consolidations within the Federal Reserve, FDIC, OTS, MAIC and OCC.
In modern time there has been huge reductions to the barriers of global competition in the banking industry.
In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation).
In the United States, the banking industry is a highly regulated industry with detailed and focused regulators.
In the past 20 years American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions.
Individual retirement accounts (IRAs) and Keogh plans — a form of retirement savings in which the funds deposited and interest earned are exempt from income tax until after withdrawal.
Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions.
Issue of money, in the form of banknotes and current accounts subject to check or payment at the customer's order.
Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).
Mail: most banks accept cheque deposits via mail and use mail to communicate to their customers, e.
Market risk: risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors.
Maturity transformation – banks borrow more on demand debt and short term debt, but provide more long term loans.
Money creation – whenever a bank gives out a loan in a fractional-reserve banking system, a new sum of virtual money is created.
Money market accounts — carry a monthly limit of preauthorized transfers to other accounts or persons and may require a minimum or average balance.
Netting and settlement of payments – banks act as both collection and paying agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments.
One of the oldest items found showing money-changing activity is a silver Greek drachm coin from ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, c.
One source of deposits for banks is brokers who deposit large sums of money on the behalf of investors through MAIC or other trust corporations.
Passbook or ordinary deposit accounts — permit any amount to be added to or withdrawn from the account at any time.
Relationship Managers, mostly for private banking or business banking, often visiting customers at their homes or businesses
Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th century.
Second, they have expanded the use of risk-based pricing from business lending to consumer lending, which means charging higher interest rates to those customers that are considered to be a higher credit risk and thus increased chance of default on loans.
Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking systems as a payment instrument.
Some types of financial institution, such as building societies and credit unions, may be partly or wholly exempt from bank license requirements, and therefore regulated under separate rules.
Telephone banking is a service which allows its customers to perform transactions over the telephone with automated attendant or when requested with telephone operator
The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions.
The United States has the most banks in the world in terms of institutions (7,085 at the end of 2008) and possibly branches (82,000).
The bank account balance is the financial position between the bank and the customer: when the account is in credit, the bank owes the balance to the customer; when the account is overdrawn, the customer owes the balance to the bank.
The bank agrees to pay the customer's checks up to the amount standing to the credit of the customer's account, plus any agreed overdraft limit.
The bank agrees to promptly collect the checks deposited to the customer's account as the customer's agent, and to credit the proceeds to the customer's account.
The bank has a lien on checks deposited to the customer's account, to the extent that the customer is indebted to the bank.
The bank has a right to combine the customer's accounts, since each account is just an aspect of the same credit relationship.
The bank may not pay from the customer's account without a mandate from the customer, e.
The bank must not close a customer's account without reasonable notice, since checks are outstanding in the ordinary course of business for several days.
The bank must not disclose details of transactions through the customer's account—unless the customer consents, there is a public duty to disclose, the bank's interests require it, or the law demands it.
The business of banking is in many English common law countries not defined by statute but by common law, the definition above.
The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital.
The changing economic environment has a significant impact on banks and thrifts as they struggle to effectively manage their interest rate spread in the face of low rates on loans, rate competition for deposits and the general market changes, industry trends and economic fluctuations.
The examples and perspective in this section may not represent a worldwide view of the subject.
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472.
The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank "bench, counter".
These implied contractual terms may be modified by express agreement between the customer and the bank.
Third, they have sought to increase the methods of payment processing available to the general public and business clients.
This also means you credit your savings account every time you deposit money into it (and the account is normally in credit), while you debit your credit card account every time you spend money from it (and the account is normally in debit).
This difference is referred to as the spread between the cost of funds and the loan interest rate.
To be able to provide home buyers and builders with the funds needed, banks must compete for deposits.
Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as:
Unlike most other regulated industries, the regulator is typically also a participant in the market, being either a publicly or privately governed central bank.
Usually the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits, even if they are not repayable to the customer's order—although money lending, by itself, is generally not included in the definition.
Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection.
Where bank transactions, balances, credits and debits are discussed below, they are done so from the viewpoint of the account holder—which is traditionally what most people are used to seeing.
 One of the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397.
 The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities.
 This is an indicator of the geography and regulatory structure of the USA, resulting in a large number of small to medium-sized institutions in its banking system.
^ "For Banks, Wads of Cash and Loads of Trouble" article by Eric Lipton and Andrew Martin in The New York Times July 3, 2009
^ (Banking Ordinance, Section 2, Interpretation, Hong Kong) Note that in this case the definition is extended to include accepting any deposits repayable in less than 3 months, companies that accept deposits of greater than HK$100 000 for periods of greater than 3 months are regulated as deposit taking companies rather than as banks in Hong Kong.
receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] .
” The potential for this is exacerbated by the reduction in the regulatory oversight of banks and in some cases depth of management.