Banking

Question 1

Types of banks

Answer 1

Traditional deposit taking banks

Development banks

Reserve (central) banks

Investment banks

Community banks

Question 2

Banking products and activities: Retail banks

Answer 2

Deposit, investment and loan products to customers
Can be long term or short term savings and secured or unsecured loans

Question 3

Banking products and activities: corporate banks

Answer 3

Traditional commercial banking activities of taking deposits, making loans, and clearing cheques are offered
They also offer merchant and payroll services to businesses

May conduct research on securities and offer recommendations on individual stocks
They offer brokerage services as well as trust services where they are willing to manage portfolios of assets of clients

Investment banking activities can be carried out

They have a banking book and trading book
Trading book: a portfolio of financial instruments held by a bank
Banking book consists of everything not included in the trading book

Question 4

Types of banking products: Retail

Answer 4

• traditional accounts
• savings accounts
• credit cards
• overdrafts
• mortgage loans
• vehicle finance loans
• unsecured personal loans: revolving and term

Question 5

Types if baking products: business

Answer 5

• transactional accounts
• overdrafts
• asset based finance
• unsecured loans
• merchant services
• foreign exchange and trade solution services
• cash solutions
• savings and investment products
• portfolio management

Question 6

Key risks

Answer 6

Credit risk
Market risk
Liquidity risk
Operational risk