class 6 Flashcards
what percentages of canadian businesses are funded by bank loans, stocks, bonds and non-bank loans?
bank loans =56%
nonbank loans= 18%
bonds= 15%
stocks=12%
what are the 8 basic facts about the banking industry?
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
who are the biggest players in the financial market?
chartered baks and life insurance companies are the biggest non-bank financial institution
what are the 7 important things that happened over the history of banking development in canada?
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
how many banks are in canada?
81 banks
how many domestic banks are in canada?
35 domestic banks
how many foreign banks are in canada?
15 foreign banks
how many foreign bank branches are in canada?
31 foreign bank branches
how many bank branches and employees are in canada?
6,000 branches and 280,000 employees
what percentage of total industry assets to the 6 largest banks hold?
more than 90%
what are schedule 1 banks?
chartered banks like RBC and TD
what are schedule 2 banks?
foreign bank subsidiaries controlled by eligible foreign institutions like bank of china
what are schedule 3 banks?
foreign bank branches of foreign institutions that only deal with companies and not people like Wells Fargo in canada
what are the big 6 banks in canada?
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)
besides charter banks, how many financial institutions provide financial services in canada?
over 4,000
