Unit 6: Retail, Commercial & Corporate Banking Flashcards
How does Retail Banks play a role in the economy and the products/services it provides?
Mainly offer products and services to individuals and small business customers.
They may offer green and sustainable products and services including green mortgages, green loans, and green savings and investments.
How does Wholesale & Investment Banks play a role in the economy and the products/services it provides?
Serve larger, corporate clients and other financial institutions and offer an increasing range of green products and services, including green and sustainability-linked loans; and green and other types of sustainable bonds.
How does Multilateral Development Banks & National Banks play a role in the economy and the products/services it provides?
Public or quasi-public institutions which usually combine policy objectives with commercial returns,
Many have played key roles in developing green and sustainable finance.
How does CentralBanks play a role in the economy and the products/services it provides?
Usually state-owned banks with lender of last resort and financial regulatory responsibilities.
What are the six UN Principles for Responsible Banking?
Principle 1: Alignment
Principle 2: Impact and Target Setting
Principle 3: Clients and Customers
Principle 4: Stakeholders
Principle 5: Governance
Principle 6: Transparency and Accountability
At what levels is the PRB required alignment?
1) Industry Level: Policymakers, regulators and industry trade associations leading a collective approach to endorsing and implementing the PRB.
2) Institutional Level: Signatories leading by example and sharing good practice.
3) Individual Level: Professional bodies and educators
What are the three main functions of Retail Banks?
1) Deposit Taking
2) Managing the Payment System
3) Extending Credit
What are some Green and sustainable retail banking products and services?
Green current accounts and payments
Green savings products
Green mortgages
Car loans
Credit and debit cards
Small and micro business lending
Government tax incentives
What are some Green and sustainable corporate banking products and services?
Green loans
Sustainability-linked loans
Syndicated loans
Corporate deposit schemes
Commercial real estate loans
Project finance
Trade finance
Asset financing and leasing
Initial Public Offerings (IPOs)
Research and advisory services
What is the LMA?
In March 2018, the Loan Market Association (LMA), a large grouping of banks, investors and professional services firms active in the syndicated loan markets in Europe, the Middle East and Africa, together with the Asia Pacific Loan Market Association (APLMA) and the International Capital Markets Association (ICMA), launched the Green Loan Principles (GLPs). These were revised and updated in 2021.
What are GLPs?
GLPs provide a voluntary framework and standards for green lending by institutions designed to promote global consistency in the application and reporting of green loans. They aim to ensure consistency in the use of the term ‘green loan’ to maintain the integrity of the green loan market and avoid instances and accusations of greenwashing.
What are the four components of GLPs?
1) Use of Proceeds
2) Process for Project Evaluation & Selection
3) Management of Proceeds
4) Reporting
What are the SLPs?
Social Loan Principles (SLPs). The SLPs provide a framework and market standards for social lending by institutions with the aim of promoting global consistency in, and the development of, the market for social loans.
What is a Social Project?
Directly aim to address or mitigate a specific social issue and/or seek to achieve positive social outcomes especially but not exclusively for a target population(s). A social issue threatens, hinders or damages the well-being of society or of a specific target population.
What is an SLLP?
Sustainability-Linked Loan Principles (SLLPs). The SLLPs are voluntary process guidelines, which set out a framework for a range of loan instruments that may utilise the Principles, based on a number of principles.
