Why Are Banks Regulated? Flashcards
Why do banks are regulated
(prudential regulations)
- deal with banks’ safety and soundness to prtect depositors’ funds
- economic stability
- concerns social goals
Banks are regulated to reduce the risk of large-scale failures that would adversely affect the level of economic activity
Domestic Markets
Corporation chartered by a state to engage in international banking
Agreement Corporation
A company that owns and/or controls one or kore U.S. banks that owns, or has controlling interest in, one or more banks
Bank Holding Company (BHC)
A financial institution that is owned by stockholders,operates for a profit, and engages in various lending activities
Commercial Bank
State-chartered savings asscociations located in Massachsetts, New Hampshire, Rhode Island and Vermont
Cooperative Bank
Financial cooperative organization of individuals a common affiliation
Credit Union
Entities primarily engaged in providing infrastructure for hosting or data processing services
Data Processing Servicer
A branch that resides in the United States, and whose parent is also located in United States
Domestic Branch of Domestic Bank
Domestic institurions that engage in banking activities usually in connection with the business of banking in United States
Domestic Entity Other
An organizatio charted by the Federal Reserve to engage in international banking and financial operations.
Edge/Agreement Corporation
Financial intermediary that makes loans to individuals or businesses.
Finance Company
A finance entity engaged in a broad range of banking-related activities, created by Gramm-Leach-Bliley Act of 1999.
Finance Holding Company
Refers to any U.S. operation of a banking organization headquartered outside the United States
Foreign Bank
Can acquire or establish freestanding banks or bank holding companies in United states
Foreign Banking Organization (FBO)
A foreign banking organization that is owned or controlled by a BHC
Foreign Banking Organization of a BHC
A foreign banking organization that is also acts as a BHC and is thus supervised by the Board of Governors of the Federal Reserve
Foreign Banking Orhanization as a BHC
A branch thag resides outside the United States but has a parent that is located in the US
Foreign Branch of a US Bank
Foreign institutions that engage in banking activities usually in conenction with the business of banking in the countries where such foreign institutions are ofganized or operating.
Foreign Entity Other
A limited service fianncial institution that raises funds by selling certificates call investment shares and by accepting deposits
Industrial Bank
Provides compensation based on the happening of one or
more contingencies.
Insurance Company
An insured branch accepts retail
deposits and must apply for federal deposit insurance.
Insured Branch of an FBO (Federal and State)
Acts as underwriter or agent that serves as intermediary between issuer of securities and the investing public.
Investment Bank/Company
A bank that is a member of the Federal Reserve System, including
all nationally chartered banks and any state-chartered or mutual savings banks that
apply for membership and are accepted.
Member Bank
A financial institution that accepts deposits primarily from
individuals and places a large portion of its funds into mortgage loans.
Mutual Savings Bank
A commercial bank whose charter is approved by the OCC rather
than by a state banking department.
National Bank
This subset includes all commercial banks that are state-chartered and are NOT members of the Federal Reserve System.
Non-Member Banks
Accepts and executes trusts but does not issue currency
Non-Depository Trust Company
Those financial institutions, not specifically listed, with authority to accept deposits of funds.
Other Depository Institution
Companies not specifically listed, but in which there is regulatory interest that are not authorized to accept deposits.
Other Non-Depository Institution
A financial institution that accepts deposits primarily from individuals and channels its funds primarily into residential mortgage loans.
Savings and Loan Association
Banking institution organized to encourage thrift by paying interest
dividends on savings.
Savings Bank
Entities primarily engaged in acting as agents (i.e., brokers) between buyers and sellers in buying or selling securities on a commission
or transaction fee basis.
Securities Broker/Dealer
This subset includes all commercial banks that are state-chartered and members of the Federal Reserve System.
State Member Banks
An organization that primarily accepts savings account deposits and invests most of the proceeds in mortgages.
Thrifts
An uninsured agency does not
accept retail deposits and need not apply for federal deposit insurance.
Uninsured Agency of an FBO (Federal and State)
An uninsured branch does not
accept retail deposits and need not apply for federal deposit insurance.
Uninsured Branch of an FBO (Federal and State)
U.S. branches and agencies of foreign banks
are entities contained within and controlled by a foreign banking organization.
U.S. Branches and Agencies of FBOs
occurs when bank failures are potentially contagious, and only then if the losses in one bank cascade into other banks or to other economies through-out the world.
Systemic Risk
