BU111 Final: BU 111 Final Exam Review Notes.docx
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BU111 Full Course Notes
Verified Note
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Four distinct legal areas/ pillars : chartered banks, alternate banks, life insurance companies. Lines between pillars have been blurred due to deregulation. Largest and most important institution: five largest account for 90% of total bank assets, bank act limits foreign-controlled banks to <8% of total domestic bank assets. Major source of short-term loans for business: secured (when you put up collateral against loan; lower rate of interest) vs. unsecured loans (not required to put up collateral) Deregulation in 1980s allowed banks to diversify their services. Changes in consumer demands- lower fees, higher rates of return. Competition from foreign banks- hsbc bank, domestic banks must remain competitive with foreign banks but are not able to merge due to regulations, back office operations decrease costs help domestic banks stay competitive. Manages economy and regulates aspects of chartered bank operations. Trust companies are being bought out by larger banks. Facilitate trade of stocks, bonds, and other products in securities markets.
