1. BANKING & FINANCE NOTES

2. THE UNITED STATES BANKING SYSTEM  Banks are businesses too!  Owned and operated like most corporations  Sells services : checking accounts, loans, investments, etc.  Banks are regulated more strictly than most other businesses.  If banks fail, thousands of people are affected and some people lose their money

3. THE FEDERAL RESERVE SYSTEM  THE FED! A bank for banks!  The government set up a national bank to supervise and regulate member banks.  Activities  Holds Reserves  Clears checks for member banks  The US is divided into 12 Federal Reserve Districts, with a central Federal Reserve Bank in each district.

4. THE FEDERAL RESERVE DISTRICTS

5. OUR ECONOMIC ACTIVITIES RELY ON BANKS  Borrow money to build roads  Borrow money to buy business supplies  Deposit cash for business operations  Finance a college education  Invest for retirement  Obtain a mortgage  Process credit card transactions  Save for vacation

6. TYPES OF FINANCIAL INSTITUTIONS Deposit Institutions  Commercial Banks  Savings & Loan Associations  Mutual Savings Banks  Credit Unions Non – Deposit Institutions  Life Insurance Companies  Investment Companies  Consumer Finance Companies  Mortgage Companies  Check-cashing outlets  Pawnshops

7. RESEARCH ASSIGNMENT  Use the internet to research the following questions. Write your answers in your notes. You will see these on next week’s quiz. 1. When did the Fed begin? 2. Why did the government create the Fed? 3. What is the amount of insurance under FDIC? Under NCUSIF? 4. Which is the difference between FDIC and NCUSIF?