1. Financial Institutions and Markets FIN 304 Dr. Andrew L. H. Parkes Day 15 “How do financial markets work?” 卜安吉

2. Financial Institutions & Markets, Day 152 Chapter 16: Commercial Banking Which is worth more? By Deposits … RankNameHeadquarters Deposits (billions) 1Bank of AmericaCharlotte, NC$683 2CiticorpNew York, NY$628 3JP Morgan ChaseNew York, NY$584 4WachoviaCharlotte, NC$330 5Wells Fargo San Francisco, CA $308 6Washington MutualSeattle, WA$204 7HSBC HoldingLondon$127 8SunTrust BankAtlanta, GA$122 9U.S. Bancorp Minneapolis, MN $122 10 Royal Bank of Scotland Edinburgh$99

3. Financial Institutions & Markets, Day 153 Chapter 16: Commercial Banking Which is worth more? By Deposits … Financial Assets of ALL Banks in the USA $ 10,792,690,613,000 Financial Assets of ALL FDIC insured institutions: $ 12,707,112,393,000

4. Financial Institutions & Markets, Day 154 Chapter 16: Commercial Banking What are they? Deposits are … List the four major Assets and Liabilities of any Bank/Savings or Credit Union Institution

5. Financial Institutions & Markets, Day 155 Chapter 16: Commercial Banking What are they? Deposits are … Two types of deposits Borrowing Loans Reserves – two types Bank Capital – Equity or Net Worth

6. Financial Institutions & Markets, Day 156 Chapter 16: Commercial Banking Show the balance sheet of the Third Savings Bank. The bank has $100,000 in checkable deposits, $50,000 in time deposits, $5,000 in bank capital, a 12 % required reserve ratio and $70,000 in loans (and securities). What is the amount of excess reserves?

7. Financial Institutions & Markets, Day 157 Chapter 16: Commercial Banking How to use more reserves? By Deposits … ? Now using T - accounts show what happens to this bank if they decide that too many reserves are being held in the vault, say $5,000, and the manager loans them out.