BU111 Lecture Notes - Lecture 9: Life Insurance
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Document Summary
Investment dealers: lines between pillars have been blurred due to deregulation. Pillar #1 chartered banks (privately owned, publicly traded, profit-seeking financial intermediary that serves individuals, businesses, and non-business organizations: largest and most important institution, concentrated and highly regulated industry. Five largest banks account for 90% of total bank assets with 100s of branches. Secured: backed by collateral, if the borrower can"t repay the loan they bank sells the collateral. Unsecured loans: backed only by the borrowers promise to repay it. Deregulation: banks altered their role as being intermediaries between depositors and borrowers to providing more financial products to make them more like investment bankers and make decisions such as asking the government to implement tougher rules on mortgages. Changes in consumer demands: consumers are starting to lean towards electronic banks (ex. Ing direct, presidents choice financial) that pay higher interest rates which is possible due to these banks limited branches.
