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The Last Word: Ch 10 Review due next Tuesday; quiz next Tuesday.

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Presentation on theme: "The Last Word: Ch 10 Review due next Tuesday; quiz next Tuesday."— Presentation transcript:

1 The Last Word: Ch 10 Review due next Tuesday; quiz next Tuesday


3 Chapter 10, Section 2 Economics

4  There are three main types of financial institutions in the US Today:  Commercial banks  Savings and Loans  Credit Unions

5  Initially established to provide loans to businesses.  **The Banking Act of 1933 created a distinction between commercial and investment banks, but deregulation in the 1980s and 90s did away with that distinction. ▪ Deregulation also led to a wave of mergers, reducing the number of banks from 12,000 in 1990 to 7,500 in 2005.  The Federal Deposit Insurance Company (FDIC - established in 1933 to insure banks) insures all commercial banks based in the US.

6  How much banks are required to keep “in reserve”;  Set by the Federal Reserve Board (more later)

7  Savings and Loans  They began in the 1830s as a way for people to pool their savings in a safe place to earn interest and a source of financing for families who wanted to buy homes.

8  Cooperative savings and lending institutions that offer services similar to commercial banks, such as savings and checking accounts.  But most credit unions specialize in mortgages and auto loans.  **Most credit unions have deposit insurance through the NCUA, and organization similar to the FDIC.  The major difference between credit unions and other institutions is that credit unions have membership requirements.  To become a member, a person must work for a particular company, belong to a particular organization, or be a part of a particular community affiliated with the credit unions.

9 Members of the US Navy Employees of Ford Members of Unions Teachers in Spokane, WA

10  Banks provide 3 main services:  Customers can store money in accounts or store valuables in safe deposit boxes.  Customers can earn money by earning interest on accounts or making investments through the bank.  Customers can borrow money using a home mortgage, auto loan, credit card, etc.

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