Banking

Finance Financial markets Financial market participants Corporate finance Personal finance Public finance Banks and Banking Financial regulation For other uses, see Bank (disambiguation). ... Image File history File links Vereinigte_Ostindische_Compagnie_bond. ... Finance is a field that studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... In finance, financial markets facilitate: The raising of capital (in the capital markets); The transfer of risk (in the derivatives markets); and International trade (in the currency markets). ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. ... This article does not cite any references or sources. ... Banks is a surname, and may refer to: Aidan Banks, bass guitarist Alan Banks, fictional character from Peter Robinson Ant Banks, rapper Antonio Banks, American wrestler Bill Banks, wrestling worker Brad Banks, American football player Briana Banks, American porn actress Carl Banks, American football player Carli Banks, American model Chip... Financial supervision is government supervision of financial institutions by regulators. ...

Types of Bank Central bank Advising bank Commercial bank Community development bank Custodian bank Depository bank Investment bank Islamic banking Merchant bank Mutual bank Mutual savings bank National bank Offshore bank Private bank Savings bank Swiss bank In international trade, a bank, operating for the exporter in the exporters country, the bank which handles letters of credit for foreign banks. ... A commercial bank is a type of financial intermediary and a type of bank. ... Community development banks (CDBs) are a special kind of bank designed to spur serve the residents of and spur economic development in low to moderate income (LMI) areas. ... In finance, a custodian bank, or simply custodian, refers to a financial institution responsible for safeguarding a firms or individuals financial assets. ... In relation to American Depositary Receipts (or ADRs), a depository bank is a U.S. bank that issues depository receipts. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. ... A mutual bank is a bank owned by the depositors. ... A mutual savings bank is a financial institution chartered by state or federal government to: (1) provide a safe place for individuals to save and (2) invest those savings in mortgages loans, stocks, bonds and other securities. ... The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... An offshore bank account is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. ... Private banks are banks which are not incorporated, and hence the entirety of their assets is available to meet the liabilities of the bank. ... A savings bank is a financial institution whose primary purpose is accepting savings deposits. ... Banking in Switzerland is characterized by stability, privacy and protection of clients assets and information. ...

Banking terms Anonymous banking Automatic teller machine Deposit Deposit creation multiplier Loan Anonymous banking is where the banks of certain countries are used for holding money or assets, based on the voluntary or statutory level of privacy the banks provide. ... Outdoor ATMs may be free-standing, like this kiosk, or built into the side of banks or other buildings An automatic teller machine, automated teller machine (ATM) or cash machine is an electronic device that allows a banks customers to make cash withdrawals and check their account balances without... Bank deposits are the large part of the money supply. They come in different types depending on withdrawal restrictions. ... There are several ways that a government, in coordination with the countries commercial banks, can increase or decrease the money supply of a country. ... A loan is a type of debt. ...

List of banks List of banks in Canada List of banks in Hong Kong List of banks in Singapore This is a list of banks throughout the world. ... // Government Bank of Canada (Central Bank) Business Development Bank of Canada “Big six” banks Royal Bank of Canada Toronto-Dominion Bank Canadian Imperial Bank of Commerce Bank of Montreal Bank of Nova Scotia National Bank of Canada Many of these banks have diversified into financial services that used to be... Hong Kong maintains a three-tier system of deposit-taking institutions, licensed banks, restricted licence banks and deposit-taking companies. ... This is a list of banks with operations in Singapore. ...

In banking, a merchant bank is a traditional term for an Investment Bank. It can also be used to describe the private equity activities of banking. This article is about the history of banking as developed by merchants, from the Middle Ages onwards. For other uses, see Bank (disambiguation). ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. ... Merchants function as professionals who deal with trade, dealing in commodities that they do not produce themselves, in order to produce profit. ...

History

Merchant banks, now so called, are in fact the original "banks". These were invented in the Middle Ages by Italian grain merchants. As the Lombardy merchants and bankers grew in stature on the back of the Lombard plains cereal crops many of the displaced Jews who had fled persecution in 1492 after Spain entered the trade. They brought with them to the grain trade ancient practices that had grown to normalcy in the middle and far east, along the Silk Route, for the finance of long distance goods trades.

The Jews could not hold land in Italy, so they entered the great trading piazzas and halls of Lombardy, alongside the local traders, and set up their benches to trade in crops. They had one great advantage over the locals. Christians were strictly forbidden the sin of usury. The Jewish newcomers, on the other hand, could lend to farmers against crops in the field, a high-risk loan at what would have been considered usurious rates by the Church, but did not bind the Jews. In this way they could secure the grain sale rights against the eventual harvest. They then began to advance against the delivery of grain shipped to distant ports. In both cases they made their profit from the present discount against the future price. This two-handed trade was time consuming and soon there arose a class of merchants, who were trading grain debt instead of grain. Look up usury in Wiktionary, the free dictionary. ... This article does not cite any references or sources. ...

It was a short step from financing trade on their own behalf to settling trades for others, and then to holding deposits for settlement of "billete" or notes written by the people who were still brokering the actual grain. And so the merchant's "benches" (bank is a corruption of the Italian for bench, as in a counter) in the great grain markets became centers for holding money against a bill (billette, a note, a letter of formal exchange, later a bill of exchange, later still, a cheque). In general, a counter is a device which stores (and sometimes displays) the number of times a particular event or process has occurred, often in relationship to a clock signal. ... A £20 Ulster Bank banknote. ... A negotiable instrument is a specialized type of contract which obligates a party to pay a certain sum of money on specified terms. ... Example of a Canadian cheque. ...

These deposited funds were intended to be held for the settlement of grain trades, but often were used for the bench's own trades in the meantime. The term bankrupt is a corruption of the Italian banca rotta, or broken bench, which is what happened when someone lost his traders' deposits. Being "broke" has the same connotation. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. ...

A sensible manner of discounting interest to the depositors against what could be earned by employing their money in the trade of the bench soon developed; in short, selling an "interest" to them in a specific trade, thus overcoming the usury objection. Once again this merely developed what was an ancient method of financing long distance transport of goods. In finance, discounting is the process of finding the current value of an amount of cash at some future date, and along with compounding cash form the basis of time value of money calculations. ...

Islamic banking has the same constraints against usury as Christianity. Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. ...

The medieval Italian markets were disrupted by wars and in any case were limited by the fractured nature of the Italian states. And so the next generation of bankers arose from migrant Jewish merchants in the great wheat growing areas of Germany and Poland. Many of these merchants were from the same families who had been part of the development of the banking process in Italy. They also had links with family members who had, centuries before, fled Spain for both Italy and England.

This course of events set the stage for the rise of banking names which still resonate today: Schroders, Warburgs, Rothschilds, even the ill-fated Barings, were all the product of the continental grain trade, and indirectly, the early Iberian persecution of Jews. It may be defined as, “ an institution which covers a wide range of activities such as management of customer services, portfolio management, credit syndication, acceptance credit, counseling and insurance etc., The merchant banks are also known as “ accepting and Issuing houses” in UK and as “Investment Banks” in US. They offer a package of financial services for fee mostly in new issues market.

Modern practices

The definition of merchant banking has changed greatly since the days of the Rothschilds. The great merchant banking families dealt in everything from underwriting bonds to originating foreign loans. Bullion trading and bond issuing were some of the specialties of the Rothschild family. The modern merchant banks, however, tend to advise corporations and wealthy individuals on how to use their money. The advice varies from counsel on Mergers and acquisitions to recommendation on the type of credit needed. The job of generating loans and initiating other complex financial transactions has been taken over by investment banks and private equity firms. Underwriting refers to the process that a large financial service provider takes a dump on your face and then uses it to assess the process of providing access to their product like providing equity capital, insurance or credit to a customer. ... For alternative meanings, see bond (a disambiguation page). ... A loan is a type of debt. ... A precious metal is a rare metallic element of high, durable economic value. ... A corporation (usually known in the United Kingdom and Ireland as a company) is a legal entity (distinct from a natural person) that often has similar rights in law to those of a Civil law systems may refer to corporations as moral persons; they may also go by the name... The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... Investment banks assist corporations in raising funds in the public markets (both equity and debt), as well as provide strategic advisory services for mergers, acquisitions and other types of transactions. ... Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. ...

Today there are many different classes of merchant banks. One of the most common forms is primarily utilized in America. This type initiates loans and then sells them to investors (Fitch 2000). Even though these companies call themselves "Merchant banks," they have few if any of the characteristics of former Merchant banks. Motto: (Out Of Many, One) (traditional) In God We Trust (1956 to date) Anthem: The Star-Spangled Banner Capital Washington D.C. Largest city New York City None at federal level (English de facto) Government Federal constitutional republic  - President George Walker Bush (R)  - Vice President Dick Cheney (R) Independence from...

A more traditional form of Merchant bank is not as widely used. This genre of merchant banking is seen in companies such as Blackstone Group [1], LCF Rothschild Group [2]and Goldman Sachs [3]. Their activities include private banking, fund management, and advisory services. Though these organizations are holding companies, their operations are essentially those of the original Merchant banks. Blackstone Group L.P. (NYSE: BX) is a prominent private equity and investment management firm founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman. ... The Goldman Sachs Group, Inc. ... Private banking is done by major institutional banks known as private banks, which offer financial services to private individuals. ... Institutional fund management is fund management conducted by large financial firms such as banks, insurance companies and major investment organisations (e. ... A holding company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. ...

See also

• list of finance topics
• list of international trade topics

Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... International trade - an overview Absolute advantage Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) APEC Autarky Balance of trade barter Bilateral Investment Treaty (BIT) Bimetallism branch plant Bretton Woods Conference Bretton Woods system British timber trade Cash crop Comparative advantage Continental trading bloc Cost, insurance and freight Currency...

References

• Fitch, Thomas P. [1990](2000)Dictionary of Banking Terms: Merchant Bank 4th Edition New York: Barron's Business Guides ISBN 0-7641-1260-0

Sources

• The Blackstone Group: Today

• LCF Rothschild Group: Activities

• Goldman Sachs: Client Services

External links

1. Blackstone Group website

2. LCF Rothschild Group website

3. Goldman Sachs Corporate website

4. Emerging Markets Group Corporate website