Banking Essay Research Paper

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Banking Essay, Research Paper  Chapter 1 Typical commercial bank organization. ?* Shareholders?* Board of Directors?*Chairman of the Board?* President?* Specific officer positions, divisions, and departments. Customers must feel confident. Some banks are organized as bank holding companies. The BHC owns the stock of the bank or banks and is under the jurisdiction of the Federal Reserve. Some BHC?s will enter into banking-related activities such as brokerage or insurance services. A bank holding company can own banks in more than one state, thus facilitating interstate banking. It can be one bank or many banks. The three functions of banking? Deposit function ?*Most common type of demand deposit is the checking account. M1 which is defined as coin and currency in

circulation, demand deposits at banks(with some exceptions), traveler?s checks, and funds withdraw able on demand at other financial institutions. M1 is the most widely quoted money supply figure because it reflects funds that are immediately available for spending.– the Payments function ?*coin and currency, checks and electronic funds transfer ? The Credit Function?* Loans, credit Chapter 2 Chronology 1791-1811 was the first bank of the U.S. 1811-1816 bank failures start to increase. 1816-1836 congress tries to create the second bank of U.S. 1836-1863 chaos in the banking system 1863 National bank act formed and ratified 1913 Federal reserve act 1929 Stock market crashed 1933 Glass-Steagall act 1934 securities Exchange act 1935 went in to effect 1970-1980 Disintermediation

1980 depository institutions deregulation and monetary control act of 1980 1982 Garn – ST Germain Act 1989 Firrea 1991 FDICIA (FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT) 1992 know your customer guidelines. National Bank was created to instill public confidence in banks. National banks were privately owned but were chartered?authorized to conduct banking business-by the federal government. Nationally charter banks have strict requirements National Bank Act?1. Created national banks 2. created the office of he comptroller of the currency (its function was and still is to charter, examine, and issue regulations governing national banks.) 3. Introduced the national banknote, and 4. Established a system of required reserves. Chapter 3 Creation of the Federal Reserve

System- regulates money and credit supples. The purpose was to redress the flawed check collection system, the inflexible currency, and the pyramided reserves. Board of Governors consists of seven members appointed by the president of the United states and confirmed by the Senate. 14 year terms Board responsibilities are- Supervise the operations of the Federal Reserve System? Set reserve requirements? Approve discount rates set by the 12 Reserve banks? appoint three of the nine directors of each Reserve bank? approve the presidents of the Reserve banks? Direct the supervision and regulation of member banks and bank holing companies? examine the operations of the Reserve banks? Represent the Federal Reserve System in its relations with the president and Congress Functions of the

Federal Reserve banks. Propose discount rates? Hold reserve balances of depository institutions? lend at the discount rate to member banks? furnish currency? Collect and clear checks? Transfer funds for depository institutions? handle U.S. government debit and credit balances. Federal Reserve services? Coin and currency? check clearing and collection? wire transfer? automated clearing house? settlement? securities safekeeping Chapter 4 Deposit function is the traditional banking function of accepting funds of credit to checking, savings, and other types of deposit accounts and, in the case of checks, converting them into usable, available funds. Items deposited are coin and currency, checks, drafts, traveler?s checks, money orders, bonds, bond coupons, interbank transfers,