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Reserve Requirement Ratio
Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the commercial bank's reserve, is generally determined by the central bank on the basis of a specified proportion of deposit liabilities of the bank. This rate is commonly referred to as the reserve ratio. Though the definitions vary, the commercial bank's reserves normally consist of cash held by the bank and stored physically in the bank vault (vault cash), plus the amount of the bank's balance in that bank's account with the central bank. A bank is at liberty to hold in reserve sums above this minimum requirement, commonly referred to as ''excess reserves''. The reserve ratio is sometimes used by a country’s monetary authority as a tool in monetary policy, to influence the country's money supply by limiting or expanding the amount of lending by the banks. Monetary authorities increase the reserve r ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Central Bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Most central banks also have supervisory and regulatory powers to ensure the stability of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks. Central banks in most developed nations are institutionally independent from political interference. Still, limited control by the executive and legislative bodies exists. Activities of central banks Functions of a central bank usually include: * Monetary policy: by setting the official interest rate and controlling the money supply; *Financial stability: acting as a government's banker and as the bankers' bank ("lender of last resort"); * Reserve management: managing a country's ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Government Guarantee
A loan guarantee, in finance, is a promise by one party (the guarantor) to assume the debt obligation of a borrower if that borrower defaults. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the debt. Private loan guarantees There are two main types: # Guarantor mortgages # Unsecured guarantor loan Guarantor mortgages Popular with young borrowers who do not have a large deposit saved and need to borrow up to 100% of the property value to purchase a property. Generally, their parents will provide a guarantee to the lender to cover any shortfall in the event of default. There are three main types # Guarantor Mortgage – generally, a parent or close family member will guarantee the mortgage debt and will cover the repayment obligations should the borrower default. # Family offset mortgage – typically, a parent or grandparent will put their savings into an account linked to the borrower’s mortgage. They do not get any intere ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Banking Act Of 1978
The Creating International Banking Act of 1978 was a legislative act that brought all American branches of foreign banks and agencies under the jurisdiction of US banking regulations. It granted FDIC The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures credi ... insurance to these domestic branches, but also required them to hold the same reserves and auditing schedules as US banks. Prior to this act, foreign banks operating in the US were subject to varying state laws with no uniformity. Thus for the benefit of both US regulators and foreign institutions seeking uniformity and stability, this act was approved. This act required foreign banks to apply for charters and approvals to operate within the United States from the Federal Reserve. Once approved, they next must meet the required rese ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Money Supply
In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include Circulation (currency), currency in circulation (i.e. physical cash) and demand deposits (depositors' easily accessed assets on the books of financial institutions). The central bank of a country may use a definition of what constitutes legal tender for its purposes. Money supply data is recorded and published, usually by a government agency or the central bank of the country. Public sector, Public and private sector analysts monitor changes in the money supply because of the belief that such changes affect the price levels of Security (finance), securities, inflation, the exchange rates, and the business cycle. The relationship between money and prices has historically been associated with the quantity theory of money. There is some empirical evidence of a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Union
A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit organization, nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provision of Credit (finance), credit, and other financial services. In several African countries, credit unions are commonly referred to as SACCOs (Savings and Credit Co-Operative Societies). Worldwide, credit union systems vary significantly in their total assets and average institution asset size, ranging from volunteer operations with a handful of members to institutions with hundreds of thousands of members and assets worth billions of US dollars. In 2018, the number of members in credit unions worldwide was 274 million, with nearly 40 million members having been added since 2016. Leading up to the financial crisis of 2007–2008, commercial banks engaged in approximately five times more subprime lending relative t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Savings Bank
A savings bank is a financial institution whose primary purpose is accepting savings account, savings deposits and paying interest on those deposits. History of banking, They originated in Europe during the 18th century with the aim of providing access to Wealth, savings products to all levels in the population. Often associated with social good, these early banks were often designed to encourage low-income people to Saving, save money and have access to banking services. They were set up by governments or by socially committed groups or organisations such as with credit unions. The structure and legislation took many different forms in different countries over the 20th century. Savings banks and Savings and loan association, savings-and-loans are often confused. The original function of savings banks to service consumers was limited to savings. Savings banks invested in Government debt, government and Corporate bond, corporate debt. Savings and loan associations had a dual p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Savings And Loan Association
A savings and loan association (S&L), or thrift institution, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include building societies and trustee savings banks. They are often mutually held (often called mutual savings banks), meaning that the depositors and borrowers are members with voting rights, and have the ability to direct the financial and managerial goals of the organization like the members of a credit union or the policyholders of a mutual insurance company. While it is possible for an S&L to be a joint-stock company, and even publicly traded, in such instances it is no longer truly a mutual association, and depositors and borrowers no longer have membership rights and managerial control. By law, thrifts can have no more than 20percent of their lending ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commercial Bank
A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with corporations or a large/middle-sized business to differentiate it from a retail bank and an investment bank. Commercial banks include private sector banks and public sector banks. History The name ''bank'' derives from the Italian word ''banco'' "desk/bench", used during the Italian Renaissance era by Florentine bankers, who used to carry out their transactions on a desk covered by a green tablecloth. However, traces of banking activity can be found even in ancient times. In the United States, the term commercial bank was often used to distinguish it from an investment bank due to differences in bank regulation. After the Great Depression, through the Glass–Steagall Act, the U.S. Congress required that commercial banks only engage in ba ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal Reserve System
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System. U.S. Congress, Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and currently also include supervising and bank regulation, regulating ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world." Formed in 1944, started on 27 December 1945, at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international monetary system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. , the fund had XDR 477 billion (a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monetary Transmission Mechanism
The monetary transmission mechanism is the process by which asset prices and general economic conditions are affected as a result of monetary policy decisions. Such decisions are intended to influence the aggregate demand, interest rates, and amounts of money and credit in order to affect overall economic performance. The traditional monetary transmission mechanism occurs through interest rate channels, which affect interest rates, costs of borrowing, levels of physical investment, and aggregate demand. Additionally, aggregate demand can be affected through friction in the credit markets, known as the credit view. In short, the monetary transmission mechanism can be defined as the link between monetary policy and aggregate demand. Traditional interest rate channels An interest rate channel may be categorized as traditional, which means monetary policy affects real (rather than nominal) interest rates, which influence investment, spending on new housing, consumer spending, and aggre ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
