class 6

Question 1

what percentages of canadian businesses are funded by bank loans, stocks, bonds and non-bank loans?

Answer 1

bank loans =56%
nonbank loans= 18%
bonds= 15%
stocks=12%

Question 2

what are the 8 basic facts about the banking industry?

Answer 2

stocks are not the most important sources of external financing for businesses

issuing marketable debt and equity securities is not the primary way in which businesses finance their operations

indirect finance is many times more important than direct finance

financial intermediaries, particular banks are the most important source of external funds used to finance businesses

the financial system is among the most heavily regulated sectors of the economy

only large, well established corporations have easy access to securities markets to finance their activities

a prevalent feature of debt contracts for both households and business is collateral

debt contracts are extremely complicated legal documents that place substantial restrictive covenants on borrowers

Question 3

who are the biggest players in the financial market?

Answer 3

chartered baks and life insurance companies are the biggest non-bank financial institution

Question 4

what are the 7 important things that happened over the history of banking development in canada?

Answer 4

1850 the free banking experiment
1866 the provincial notes act
1870 the dominion notes act- gold standard
1871 the first bank act- set banking regulations
1881-1913 the bank act
1914 the finance act
1935 the bank of Canada act- money issued by BoC

Question 5

how many banks are in canada?

Answer 5

81 banks

Question 6

how many domestic banks are in canada?

Answer 6

35 domestic banks

Question 7

how many foreign banks are in canada?

Answer 7

15 foreign banks

Question 8

how many foreign bank branches are in canada?

Answer 8

31 foreign bank branches

Question 9

how many bank branches and employees are in canada?

Answer 9

6,000 branches and 280,000 employees

Question 10

what percentage of total industry assets to the 6 largest banks hold?

Answer 10

more than 90%

Question 11

what are schedule 1 banks?

Answer 11

chartered banks like RBC and TD

Question 12

what are schedule 2 banks?

Answer 12

foreign bank subsidiaries controlled by eligible foreign institutions like bank of china

Question 13

what are schedule 3 banks?

Answer 13

foreign bank branches of foreign institutions that only deal with companies and not people like Wells Fargo in canada

Question 14

what are the big 6 banks in canada?

Answer 14

royal bank of canada
canadian imperial bank of commerce
bank of Montreal
bank of Nova Scotia
toronto-dominion bank
national bank of canada

(laurentian bank of canada, canadian western bank)

Question 15

besides charter banks, how many financial institutions provide financial services in canada?

Answer 15

over 4,000

Question 16

what are some other financial institutions besides banks?

Answer 16

trusts
mortgage loan companies
credit unions
casisses populaires
insurance company
pension funds
mutual funds
government savings institutions

Question 17

how many commercial banks are in the US?

Answer 17

6000

Question 18

why are many financial institutions restricted the ability to open branches?

Answer 18

due to the McFadden act, this cannot allow banks to open another branch on other states

Question 19

what are the 10 largest banks in the US?

Answer 19

1) J.P Morgan chase & co
2) Bank of America corp
3) Citigroup inc
4) Wells Fargo & co
5) Goldman Sachs group
6) Morgan stanley
7) U.S bankcorp
8) PNC financial services group
9) TD group us
10) capital one financial corp

Question 20

true or false, a schedule 2 bank may have a significant shareholder more than 10% for up to 10 years after chartering?

Answer 20

true

Question 21

why is the U.S banking system considered to be a dual system?

Answer 21

because it is regulated by both state and federal governments