Professional Documents
Culture Documents
Dosen:
Ir. Kayim Hanuri, MSc
M
Mata Kuliah
PRINSIP-PRINSIP PENGOPERASIAN BANK
PROGRAM PASCA SARJANA
UNIVERSITAS GUNADARMA
April, 2009
SessionI.MMIbii.Okt05.
Outline
Financial markets
Producing units Flow of funds (savings)
(mainly businesses Flow of financial services, Consuming units
Income, and financial (mainly households)
and governments) claims
Factor markets
Economic Functions of the Global Financial System
and Financial Markets
Saving Function:Provide a conduit for the public savings (bonds,
stocks and other financial claims)
Wealth Function:Accumulated savings built up over time
represent a stock of assets (refer to as wealth)
Liquidity Function:Provides a means of converting financial
instruments (claims) into cash with little risk of loss
Credit function: Provide credit to finance consumption and
investment spending
Payments Function: Provide a mechanism for making payments
for purchases of goods and services
Risk Protection Function: Offer businesses, consumers and
governments protection againts life, health, property and
income risks.
Policy Function: Be as the principal channel through which
government has carried out its policy of attempting to stabilize
the economy and avoid inflation.
An Overview of Banks and
Financial-Services Sector
What is a bank?
Based on the economic functions it serves:
Banks are involved in transferring funds from savers to
borrowers (financial intermediation) and in paying for
goods and services.
Based on the legal basis for its existence (USA and
still used by many nations):
A bank is any business offering deposits subject to
withdrawal on demand (such as by writing a check or
making an electronics transfer of funds) and making loans
of a commercial or business nature (such as granting
credit to private business seeking to expand the inventory
of goods on their shelves or to purchase new equipment)
Note: Under federal law, a bank is any institution that could
qualify for deposit insurance administrated by the Federal
Deposit Insurance Corporation (FDIC)
What is a bank?
Based on the services it offers:
Commercial banks: Sell deposits and make loans to business and individuals
Savings banks: Attract savings deposits and make loans to individuals and
families
Cooperative banks: Help farmers, ranchers and consumers acquire goods and
services
Motrgage loans: Provide mortgage loans on new homes and housing projects
Community banks: Are smaller, locally focused commercial and savings banks
Investment banks: Underwrite issues of new securities by their customers
Merchant banks: supply both debt and equity capital to business
International banks: Commercial banks present in more than one nation
Wholesale banks: A larger commercial banks serving corporations and
government
Retail banks: Serving primarily households and small businesses
Insured banks: Maintain deposits backed by FDIC
State banks: Function under charters issued by banking commissions in the
various states
National banks: Function under charters by federal charter through the
Comptroller of the Currency
Universal banks: Offer all financial services available in todays marketplace
Bank Competitors?
Insurance companies and pension plans: Providing
customers with long-term savings plans, risk protection,
and credit
Finance companies: Supplying customers with access to
cash (liquidity) and short-to-medium term loans for
everything
Mutual funds: Supplying profesional cash management
and investing services for long-term savers
Security brokers and dealers: Providing investment
and savings planning, executing security purchases and
sales, and providing credit crads to their customers
Credit unions and other Thrift Institutions: Offering
customers credit, payments, and savings deposit services
often fully comparable to what banks offer
Financial holding companies or conglomerates:
Highly diversified financial-service providers that control
multiple financial firms offering many different services
Service Areas in the Modern Banks
The credit function
The payment (transaction) function
The thrift (savings) function
The investment/financial planning function
The real estate and community development function
The cash management function
The merchant banking (temporary stock investment)
function
The invesment banking (security underwriting)
function
The security brokerage (trading) function
The insurance (risk management) function
Key Trends Affecting Banks and Other Financial-
Services Firms
Service proliferation: Due to the competion pressure, more
knowledgeable and demanding customers, and shifting
technology. Its impact: operating costs increase and greater risk
of failure.
Rising competition
Government Deregulation
An Increasingly Interest-Sensitive Mix of Funds
Technological Change
Consolidation and Geographic Expansion
Convergence: The movement of businesses across industry lines
so that a firm formerly offering only one product line ventures
into other product lines in order to broaden its sales share.
Globalization
Increased Risk of Poor Performance and Failure
Are Traditional Banks Dead or Dying?
Recently, some depository institutions have merged & failed in the
United States, Europe and Asia. Between 1980 and 2003 more than
1.500 insured depository institutions failed and more than 9.000
mergers occurred.
Bankings share of the market for financial services in declining.
Exessive regulation of banks and little or no regulation of many of their
competitors is a primary cause of these recent development. The
deregulation is a must if banking is to remain strong
Many banks are trying to fight back and preserve their market share
by:
Offering new services
Charging higher user fees for many formerly free services (ATMs)
Offering more services through subsidiary businesses (security
trading and underwriting)
Entering into joint ventures with independent companies (such
insurers)
Traditional banks may be dead or dying, but if banks are given
freedom to respond to the publics changing demands for new services,
they need not pass away merely from the blows of their financial-
services competitors.
Government Policy and Regulation
on Banking and the Financial
Services Industry
Why are most banks so heavily regulated?