1. Financial Institutions and Markets Winter 2010 – FIN 304 Dr. Andrew L. H. Parkes Day 14 “How do financial markets work?” 卜安吉

2. Feb. 22, 2011Financial Institutions & Markets, Day 142 North American Bank Ranking by Asset Size ($mm) 1 JPMorgan Chase & Co.12/31/20082,175,052 2 Citigroup Inc.12/31/20081,938,470 3 Bank of America Co.12/31/20081,817,943 4 Wells Fargo & Co.12/31/20081,309,639 5 Goldman Sachs, Inc11/30/2008 884,547 6 Morgan Stanley11/30/2008 658,812 7 Royal Bank of Canada01/31/2009 580,311 8 Toronto-Dominion Bk01/31/2009 476,312 9 Bank of Nova Scotia01/31/2009 414,848 10 BMO Financial Group 01/31/2009 360,611 * Canadian denominated assets converted based on C$1.00/$0.8137 exchange rate on 1/31/09. http://www.bmocm.com/aboutus/aboutbmocm/images/Top_25_North_American_Commercial_Banks_by_Assets.pdf

3. Feb. 22, 2011Financial Institutions & Markets, Day 143 Chapter 15: Bank Management What are they? Deposits are … List the four major Assets and Liabilities of any Bank/Savings or Credit Union Institution IN A BALANCE SHEET:

4. Feb. 22, 2011Financial Institutions & Markets, Day 144 Chapter 15: Bank Management What are they? Deposits are … Two types of deposits Borrowing Loans Reserves – two types Bank Capital – Equity or Net Worth

5. Feb. 22, 2011Financial Institutions & Markets, Day 145 Chapter 15: Bank Management Show the balance sheet of the Third Savings Bank. The bank has $120,000 in checkable deposits, $250,000 in time deposits, is borrowing $30,000, has $45,000 in bank capital, a 12 % required reserve ratio as well as $340,000 in loans and $80,000 in securities. What is the amount of excess reserves?

6. Feb. 22, 2011Financial Institutions & Markets, Day 146 Chapter 15: Bank Management How to use more reserves? By Deposits … ? b) Now using with a T - Account show what happens to this bank if there is a deposit outflow of $5,000.

7. Feb. 22, 2011Financial Institutions & Markets, Day 147 Chapter 15: Bank Management c) Now using a balance sheet show what happens to this bank if there is an additional deposit outflow of $8,000, make sure to explain how you, as the bank account manager, would deal with any issues!

8. Feb. 22, 2011Financial Institutions & Markets, Day 148 Chapter 15: Bank Management What is the correct level of ownership? More owners – more capital and larger potential assets. The more owners, the more conflicts the smaller ROE! … ? d) What is the percentage of bank capital? What is the requirement?