AN OVERVIEW OF BANKS AND THE FINANCIAL- SERVICES SECTOR

Traditional Services Offered By Banks –Exchange of Currency –Commercial Notes and Loans –Offering Savings Deposits –Safekeeping of Valuables –Supporting Government Activities with Credit –Checking Accounts –Trust Services

Recent Services of Banks Consumer Loans Financial Advice Cash Management Equipment Leasing Venture Capital Loans Selling Insurance Products Security Underwriting and Brokerage Services

Mutual Funds and Annuities –Annuities, long term saving plan that promise the payment of a stream of income to the annuity holder beginning on designated future date –M F. professionally managed investment programs that invest in stock, bonds ….etc

Merchant Banking Services Risk management and hedging services –either acting as dealers( market maker) by protecting bank’s customers from third party, –Or directly selling their customers the bank’s own risk protection contract where they take the customer risk and find creative way to mange it –E.g J.P Morgan and Citibank,

The Roles of Commercial Banks and Their Closest Competitors Intermediation Role Payment Role Guarantor Role Risk Management Role Savings/Investment Advisor Role Safekeeping/Certification of Value Role Agency Role Policy Role

Trends Affecting Banks and Other Financial Service Firms Today Service Proliferation Rising Competition Government Deregulation Increased Interest Rate Sensitivity Technological Change Consolidation and Geographic Expansion E-Banking and E-Commerce Convergence Globalization Increased Risk of Poor Performance and Failure