1. © South-Western Publishing Slide 1 SPECIALIZED BANK SERVICES 9.1 9.1 International Banking 9.2 9.2 Insurance and Brokerage 9.3 9.3 Cash Management 9.4 9.4 Trusts 9

2. © South-Western Publishing Slide 2 Lesson 9.1 INTERNATIONAL BANKING Identify three types of financial institutions engaged in international banking Describe international services offered by banks GOALS

3. © South-Western Publishing Slide 3 STRUCTURE OF INTERNATIONAL SERVICES Foreign banks U.S.-based international banking Other types of international operations Special considerations Financial risk Currency risk Country risk

4. © South-Western Publishing Slide 4 INTERNATIONAL SERVICES Trade financing Letters of credit Drafts and wires International collections Foreign currency exchange Trade consulting U.S. export-import (Ex-Im) bank Overseas private investment corporation (OPIC) Small business administration (SBA)

5. © South-Western Publishing Slide 5 Lesson 9.2 INSURANCE AND BROKERAGE Explain the effects of the Gramm-Leach- Bliley Act of 1999 List typical insurance and brokerage products available from financial institutions GOALS

6. © South-Western Publishing Slide 6 A NEW ERA The old world: Glass-Steagall Act The new world: Gramm-Leach-Bliley ACT (GLBA) Limits and regulation

7. © South-Western Publishing Slide 7 PERSONAL INSURANCE PRODUCTS Auto insurance Credit insurance Disability insurance Life insurance Health insurance Homeowner’s insurance Mortgage disability insurance Title insurance

8. © South-Western Publishing Slide 8 BUSINESS INSURANCE Commercial liability Short-term disability Long-term disability Health insurance Officers’ liability Property Workers’ compensation

9. © South-Western Publishing Slide 9 BROKERAGE SERVICES Brokerage refers to bringing together parties interested in making a transaction, such as buying and selling shares of stock. A broker charges a fee to execute the transaction. Banks now offer full investment services.

10. © South-Western Publishing Slide 10 Lesson 9.3 CASH MANAGEMENT Explain why banks are in a good position to offer cash management services List several cash management services banks perform for businesses GOALS

11. © South-Western Publishing Slide 11 SYSTEM IN PLACE FOR CASH MANAGEMENT Every business needs to disburse and collect cash to complete business transactions. Banks are in a good position to provide cash management services to businesses for a number of reasons. Experience Business knowledge Technology Industry expertise

12. © South-Western Publishing Slide 12 CASH MANAGEMENT Accounting services Bank collection services Information services Credit card services Capital services

13. © South-Western Publishing Slide 13 ACCOUNTING SERVICES Payroll Accounts payable Accounts receivable

14. © South-Western Publishing Slide 14 BANK COLLECTION SERVICES Deposit service Lockbox service Zero-balance accounts Automated Clearing House (ACH) Network

15. © South-Western Publishing Slide 15 INFORMATION SERVICES Electronic Data Interchange (EDI) Computer-to-computer exchange of business information Banks can advise and provide services

16. © South-Western Publishing Slide 16 CREDIT CARD SERVICES Credit card processing Stored-value card Credit analysis

17. © South-Western Publishing Slide 17 CAPITAL SERVICES Capital investments Financing Factoring

18. © South-Western Publishing Slide 18 Lesson 9.4 TRUSTS Explain what trust services are Identify important types of trust services banks provide GOALS

19. © South-Western Publishing Slide 19 WHAT ARE TRUST SERVICES? A trust is an arrangement by which one party holds property on behalf of another party for certain defined purposes. The donor, or settlor, is the person who creates a trust. The beneficiary is the person for whose benefit the property is held. Corpus, or res, refers to the property that is held.

20. © South-Western Publishing Slide 20 TRUST SERVICE PRODUCTS Retirement planning Estate planning Estate settlement Testamentary trust Charitable remainder trust Living trust

21. © South-Western Publishing Slide 21 RETIREMENT PLANNING IRA 401(k) plan Variable annuity

22. © South-Western Publishing Slide 22 ESTATE PLANNING Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. An estate is the total property, real and personal, that an individual owns. The cornerstone of any estate plan is a will, a document by which the individual gives instructions as to what is to happen upon his or her death in regard to property and remains. Probate is a court proceeding that settles an estate’s final debts and formally passes legal title to property from the decedent to his or her heirs.

23. © South-Western Publishing Slide 23 ESTATE SETTLEMENT Identifying and valuing the estate assets Paying creditors, estate expenses, and taxes Preparing and filing the necessary tax documents with federal and/or state authorities Distributing assets to beneficiaries

24. © South-Western Publishing Slide 24 TESTAMENTARY TRUST Testamentary trusts are established by a will and take effect at the donor’s death. They receive the assets of the estate to hold and manage for the benefit of the heirs.

25. © South-Western Publishing Slide 25 CHARITABLE REMAINDER TRUST A charitable remainder trust (CRT) is an irrevocable trust designed to convert the highly appreciated assets of a trustor into a lifetime income stream without generating estate and capital gains taxes.

26. © South-Western Publishing Slide 26 LIVING TRUST A living trust is a legal document that provides an expedient way to transfer property at a person’s death.