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...)
Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative
banking institutions take deposits and lend money in most parts of the world.
In addition to the bill payment facility, most banks will also offer various features with their electronic bill payment systems. These include the ability to schedule payments in advance to be made on a specified date (convenient for installments such as mortgage and support payments), to save the biller information for reuse at a future time and various options for searching the recent payment history. In many cases the payment data can also be downloaded and posted directly into the customer's
accounting or personal finance software. (Full article...)
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Banking regulation and supervision refers to a form of
financial regulation which subjects
banks to certain requirements, restrictions and guidelines, enforced by a
financial regulatory authority generally referred to as banking supervisor, with semantic variations across jurisdictions. By and large, banking regulation and supervision aims at ensuring that banks are safe and sound and at fostering
market transparency between banks and the individuals and
corporations with whom they conduct business.
Its main component is prudential regulation and supervision whose aim is to ensure that banks are viable and resilient ("safe and sound") so as to reduce the likelihood and impact of bank failures that may trigger
systemic risk. Prudential regulation and supervision requires banks to control risks and hold adequate capital as defined by
capital requirements, liquidity requirements, the imposition of concentration risk (or large exposures) limits, and related reporting and public disclosure requirements and supervisory controls and processes. Other components include supervision aimed at enforcing
consumer protection, sometimes also referred to as conduct-of-business (or simply "conduct") regulation and supervision of banks, and
anti-money laundering supervision that aims to ensure banks implement the applicable
AML/CFT framework.
Deposit insurance and resolution authority are also parts of the banking regulatory and supervisory framework. Bank (prudential) supervision is a form of "microprudential" policy to the extent it applies to individual credit institutions, as opposed to
macroprudential regulation whose intent is to consider the
financial system as a whole. (Full article...)
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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World map showing
real GDP growth rates for 2009; countries in brown were in a recession.
The Great Recession was a period of marked general decline observed in national economies globally, i.e. a
recession, that occurred in the late 2000s. The scale and timing of the recession varied from country to country (see map). At the time, the
International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the
Great Depression. One result was a serious disruption of
normal international relations.
The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of the United States
housing bubble in 2005–2012. When housing prices fell and homeowners began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007–2008, causing several to collapse or be bailed out in September 2008. This 2007–2008 phase was called the
subprime mortgage crisis. The combination of banks unable to provide funds to businesses, and homeowners paying down debt rather than borrowing and spending, resulted in the Great Recession that began in the U.S. officially in December 2007 and lasted until June 2009, thus extending over 19 months. As with most other recessions, it appears that no known formal theoretical or empirical model was able to accurately predict the advance of this recession, except for minor signals in the sudden rise of forecast probabilities, which were still well under 50%. (Full article...)
Fractional-reserve banking is the system of
banking in all countries worldwide, under which banks that take
deposits from the public keep only part of their
deposit liabilities in liquid assets as a reserve, typically lending the remainder to borrowers.
Bank reserves are held as
cash in the bank or as balances in the bank's account at the
central bank. Fractional-reserve banking differs from the hypothetical alternative model,
full-reserve banking, in which banks would keep all depositor funds on hand as reserves.
The country's central bank may determine a minimum amount that banks must hold in reserves, called the "
reserve requirement" or "reserve ratio". Most commercial banks hold more than this minimum amount as
excess reserves. Some countries, e.g. the core
Anglosphere countries of the United States, the United Kingdom, Canada, Australia, and New Zealand, and the three Scandinavian countries, do not impose reserve requirements at all. (Full article...)
Other areas of ethical consumerism, such as fair trade labelling, have comprehensive codes and regulations which must be adhered to in order to be certified. Ethical banking has not developed to this point; because of this it is difficult to create a concrete definition that distinguishes ethical banks from conventional banks. Ethical banks are regulated by the same authorities as traditional banks and have to abide by the same rules. While there are differences between ethical banks, they do share a desire to uphold principles in the projects they finance, the most frequent including:
transparency and social and/or environmental values. Ethical banks sometimes work with narrower profit margins than traditional ones, and therefore they may have few offices and operate mostly by phone, Internet, or mail. Ethical banking is considered one of several forms of
alternative banking. (Full article...)
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An export credit agency (known in
trade finance as an ECA) or investment insurance agency is a private or quasi-governmental institution that acts as an intermediary between national governments and
exporters to issue export insurance solutions and guarantees for financing. The financing can take the form of
credits (financial support) or credit
insurance and
guarantees (pure cover) or both, depending on the mandate the ECA has been given by its government. ECAs can also offer credit or cover on their own account. This does not differ from normal banking activities. Some agencies are government-sponsored, others private, and others a combination of the two.
ECAs currently finance or underwrite about US$430 billion of business activity abroad – about US$55 billion of which goes towards project finance in developing countries – and provide US$14 billion of insurance for new foreign direct investment, dwarfing all other official sources combined (such as the World Bank and Regional Development Banks, bilateral and multilateral aid, etc.). As a result of the claims against developing countries that have resulted from ECA transactions, ECAs hold over 25% of these developing countries' US$2.2 trillion debt. (Full article...)
Unlike
commercial banks and
retail banks, investment banks do not take
deposits. The revenue model of an investment bank comes mostly from the collection of fees for advising on a transaction, contrary to a commercial or retail bank. From the passage of
Glass–Steagall Act in 1933 until its repeal in 1999 by the
Gramm–Leach–Bliley Act, the
United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including
G7 countries, have historically not maintained such a separation. As part of the
Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd–Frank Act of 2010), the
Volcker Rule asserts some institutional separation of investment banking services from commercial banking. (Full article...)
The
ECB Governing Council makes
monetary policy for the
Eurozone and the
European Union, administers the
foreign exchange reserves of EU member states, engages in foreign exchange operations, and defines the intermediate monetary objectives and key interest rate of the EU. The
ECB Executive Board enforces the policies and decisions of the Governing Council, and may direct the national central banks when doing so. The ECB has the exclusive right to authorise the issuance of
euro banknotes. Member states can issue
euro coins, but the volume must be approved by the ECB beforehand. The bank also operates the
TARGET2 payments system. (Full article...)
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Since 2010, Crédit Agricole has been headquartered in a remodeled former
Schlumberger plant in
Montrouge, known as Campus Evergreen
Crédit Agricole Group (French:[kʁediaɡʁikɔl]), sometimes called La banque verte (
lit.'The green bank', due to its historical ties to
farming), is a French international banking group and the world's largest
cooperative financial institution. It is the second largest bank in France, after
BNP Paribas, as well as the third largest in Europe and tenth largest in the world. It consists of a network of Crédit Agricole local banks, 39 Agricole regional banks and a central institute, the Crédit Agricole S.A.. It is listed through Crédit Agricole S.A., as an intermediate
holding company, on
Euronext Paris' first market and is part of the
CAC 40 stock market index. Local banks of the group owned the regional banks, in turn the regional banks majority owned the S.A. via a holding company, in turn the S.A. owned part of the subsidiaries of the group, such as LCL, the Italian network and the CIB unit. It is considered to be a
systemically important bank by the
Financial Stability Board.
The Bank of Estonia (
Estonian: Eesti Pank) is the Estonian member of the
Eurosystem and has been the
monetary authority for
Estonia from 1919 to 2010, albeit with a long suspension between 1940 and 1991, issuing the
Estonian kroon. The bank doesn't translate its name to English but uses its Estonian name Eesti Pank in all English communications. (Full article...)
In Canada, the bank's personal and commercial banking operations are branded as RBC Royal Bank in English and RBC Banque Royale in French and serves approximately 11 million clients through its network of 1,284 branches.
RBC Bank is a US banking subsidiary which formerly operated 439 branches across six states in the
Southeastern United States, but now only offers cross-border banking services to Canadian travellers and expats. RBC's other
Los Angeles-based US subsidiary
City National Bank operates 79 branches across 11 US states. RBC also has 127 branches across seventeen countries in the Caribbean, which serve more than 16 million clients.
RBC Capital Markets is RBC's worldwide investment and corporate banking subsidiary, while the investment brokerage firm is known as
RBC Dominion Securities. Investment banking services are also provided through RBC Bank and the focus is on middle market clients. (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...)
Image 21Statesman
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)