A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Whereas banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional-reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords. (Full article...)
Different wire transfer systems and operators provide a variety of options relative to the immediacy and finality of settlement and the cost, value, and volume of transactions. Central bank wire transfer systems, such as the Federal Reserve's Fedwire system in the United States, are more likely to be real-time gross settlement (RTGS) systems, as they provide the quickest availability of funds. This is because they post the gross (complete) entry against electronic accounts of the wire transfer system operator. Other systems, such as the Clearing House Interbank Payments System (CHIPS), provide net settlement on a periodic basis. More immediate settlement systems tend to process higher monetary value time-critical transactions, have higher transaction costs, and have a smaller volume of payments. A faster settlement process allows less time for currency fluctuations while money is in transit. (Full article...)
Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business's calendar year. (Full article...)
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An industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions. They provide niche financial services nationwide. ILCs offer FDIC-insured deposits and are subject to FDIC and state regulator oversight. All "FDIC-insured entities are subject to Sections 23A and 23B of the Federal Reserve Act, which limits bank transactions with affiliates, including the non-bank parent company." ILCs are permitted to have branches in multiple states (which is permitted by many states on a reciprocal basis). They are regulated and supervised by state charters and insured by the Federal Deposit Insurance Corporation. They are authorized to make consumer and commercial loans and accept federally insured deposits. Banks may not accept demand deposits if the bank has total assets greater than $100 million. ILCs are exempted from the Bank Holding Company Act.
ILCs assist numerous charities and provide millions of dollars annually in grants, low interest loans, and service through the Community Reinvestment Act (CRA). Currently, only seven states offer an ILC bank charter. Most ILCs have been chartered by the Utah Department of Financial Institutions. Other states permitting ILCs include California, Colorado, Minnesota, Indiana, Hawaii, and Nevada. (Full article...)
Otherwise known as bank–client confidentiality or banker–client privilege, the practice was started by Italian merchants during the 1600s near Northern Italy (a region that would become the Italian-speaking region of Switzerland). Geneva bankers established secrecy socially and through civil law in the French-speaking region during the 1700s. Swiss banking secrecy was first codified with the Banking Act of 1934, thus making it a crime to disclose client information to third parties without a client's consent. The law, coupled with a stable Swiss currency and international neutrality, prompted large capital flight to private Swiss accounts. During the 1940s, numbered bank accounts were introduced creating an enduring principle of bank secrecy that continues to be considered one of the main aspects of private banking globally. Advances in financial cryptography (via public-key cryptography) could make it possible to use anonymous electronic money and anonymous digital bearer certificates for financial privacy and anonymous Internet banking, given enabling institutions and secure computer systems. (Full article...)
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The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub. L.Tooltip Public Law (United States)106–102 (text)(PDF), 113 Stat.1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies, and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies. The legislation was signed into law by President Bill Clinton.
A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998. Less than a year later, GLBA was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank." (Full article...)
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A Christmas club is a special-purpose savings account, first offered by various banks and credit unions in the United States beginning in the early 20th century, including the Great Depression. Bank customers would deposit a set amount of money each week into a savings account, and receive the money back at the end of the year for Christmas shopping. (Full article...)
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The Diamond–Dybvig model is an influential model of bank runs and related financial crises. The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any time) may give rise to self-fulfilling panics among depositors. Diamond and Dybvig, along with Ben Bernanke, were the recipients of the 2022 Nobel Prize in Economics for their work on the Diamond-Dybvig model. (Full article...)
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The CAMELS rating is a supervisory rating system originally developed in the U.S. to classify a bank's overall condition. It is applied to every bank and credit union in the U.S. and is also implemented outside the U.S. by various banking supervisory regulators.
In the past, the custodian bank purely focused on custody, safekeeping, settlement, and administration of securities as well as asset servicing such as income collection and corporate actions. Yet, in the modern financial world, custodian banks have started providing a wider range of value-adding or cost-saving financial services, ranging from fund administration to transfer agency, from securities lending to trustee services. (Full article...)
Bank One traces its roots to the merger of Illinois based First Chicago NBD, and Ohio-based First Banc Group (later Bank One), a holding company for the City National Bank in Columbus, Ohio. (Full article...)
Credit Suisse was founded in 1856 to fund the development of Switzerland's rail system. It issued loans that helped create Switzerland's electrical grid and the European rail system. In the 1900s, it began shifting to retail banking in response to the elevation of the middle class and competition from fellow Swiss banks UBS and Julius Bär. Credit Suisse partnered with First Boston in 1978 before buying a controlling share of the bank in 1988. From 1990 to 2000, the company purchased institutions such as Winterthur Group, Swiss Volksbank, Swiss American Securities Inc. (SASI), and Bank Leu. (Full article...)
PSBC was set up with an initial capital of RMB20 billion in 2007 from the State Post Bureau. Today it has RMB1.5 trillion in deposits and the second largest number of branches, after the Agricultural Bank of China. (Full article...)
ICBC became the world's largest bank by total assets in 2012 (based on year-end balance sheet) and has kept this rank ever since. It was ranked first on the Forbes Global 2000 list of the world's top public companies in 2015. On 31 December 2022, It was the third-largest bank in the world by market capitalization at $211 billion. It is one of the most profitable companies in the world, ranking fourth according to Forbes in 2022 . It has been designated a systemically important bank by the Financial Stability Board (FSB) since the start of the FSB's listing. (Full article...)
Chemical's logo, adopted from Manufacturers Hanover after the banks' merger
Chemical Bank was a bank with headquarters in New York City from 1824 until 1996. At the end of 1995, Chemical was the third-largest bank in the U.S., with about $182.9 billion in assets and more than 39,000 employees around the world.
Image 12Statesman Jan van den Brink was instrumental in the merger of Amsterdamsche Bank and Rotterdamsche Bank in 1964, and remained on the bank's board until 1978 (from AMRO Bank)
Image 13Branch of Nepal Bank in Pokhara, Western Nepal. (from Bank)
Image 14Beethovenstraat branch in Amsterdam, 1970 (from AMRO Bank)