FIN 321 EXAM 2

FIN 321 EXAM 2

commercialoubanksou-ouans--largestougroupouofouFIs
-oumajorouassetsouareouloansou
-oumajorouliabilitiesouareoufederallyouinsuredoudepositsou
-ouperformouservicesouessentialoutoouUSoufinancialoumarkets

performouservicesouessentialoutoouUSoufinancialoumarketsou-ouans---
ouplayouaoukeyouroleouinoutheoutransmissionouofoumonetaryoupolicyou
-ouprovideoupaymentouservicesouandoucreditouallocationou
-
ouprovideourisk,oumaturity,oudenomination,ouandouliquidityouintermediationouservicesoutoous
avers

commercialoubankouassetsou-ouans---oucashouassetsou
-ouinvestmentousecuritiesou
-ouloansou
-ouotherouassets

cashouassetsou-ouans--
heldoutooumeetoureserveourequirementsouandoutoouprovideouliquidity

investmentousecuritiesou-ouans--canougenerateourevenueouandoualsoouprovideouliquidityou
-oufedoufundsoulent,outreasuryouandoumunicipalousecurities,ouetc.

loansou-ouans--primaryouassets,ougenerateoutheoumostourevenueouforoubanksou
-oumajorouloanoutypes:oucommercialouandouindustrial/
oubusinessouloans,ourealouestateouloans,ouindividualouloans,ouothers


depositsou-ouans--largestousourceouofoufundsouforoucommercialoubanks

Nondepositouliabilitiesou-ouans--fedoufundsouborrowed,ounotesouandoubonds,ouetc

equityou-ouans--minoulevelsouofouequityoucapitalouareourequiredoubyouregulators

someourisksoufacedoubyoucommercialoubanksou-ouans--
CBoufaceouuniqueourisksoubcouofoutheirouassetoustructure
-oucreditou(default)ouriskou
-ouliquidityouriskou
-ouinterestourateourisk

, off-balance-sheetouactivitiesou-ouans--
mayouleadoutoouchangesouinouassetsouorouliabilitiesouon-balance-
sheet,oucontingentouuponousomeoueventouoccurringouorousomeoufutureououtcomeou
-ouCBouengageouinoumanyouactivitiesouthatouareouconductedouoffoutheoubalanceousheet

retailoubankingou-ouans--consumerouorientedou
-ouprovideouresidentialouandouconsumerouloans

wholesaleoubankingou-ouans--commercialouorientedou
-ouprovideoucommercialouandouindustrial

bankousizeouandouactivitiesou-ouans--
sizeouhasoutraditionallyouaffectedoutheoutypesouofouactivitiesouandoufinancialouperformance
ouofoucommercialoubanksou
-ousmalloubanksoutypicallyoufocusouonoutheouretailousideou
-
oulargeouusuallyouengageouinoubothouretailouandouwholesaleoubanking,ouoftenoufocusingou
moreouonoutheouwholesaleouside

largerouvsousmalleroubankoucommonoudifferencesou-ouans---
oulargerougenerallyoulendoutooulargeroucorps.ou
*oumeaningoutheirounetouinterestoumarginsouareouusuallyounarrowerouthanouthoseouofousma
llerou
-
oulargeoutendoutooudiversifyoutheirouoperationsoumoreouandougenerateoumoreounoninteresto
uincomeouthanousmallou
-
oulargeoutendoutooupayouhigherousalariesouandouinvestoumoreouinoubuildingsouandoupremis
es
-oulargeouusuallyouinvolveoumoreouoff-balance-sheetouactivitiesou
-oulargeoutendoutoouholdoulessouequity

returnouonouassetsou-ouans--netouincome/assets

returnouonouequityou-ouans--netouincome/equity

netouinterestoumarginou-ouans--(interestouincomeou-ouinterestouexpense)/earningouassets

regulatorsou-ouans---
outheouFederaloudepositouinsuranceoucorp.ouinsuresoutheoudepositsouofoucommercialouban
ks
-
outheoufederaloureserveousystemouhasouregulatoryoupowerouoverounationallyoucharteredoub
anksouandoustateoubanksouthatouoptouintooutheouFRs