Banking

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					Banking

Economics 120



                1
Canadian Chartered Banks
   Chartered bank – term used to describe a
    financial institution operating under the
    authority of Parliament that accepts
    deposits and lends money to businesses,
    government, and households
Types of Deposits
 Chequing account – demand deposit (your
  money is available to you on demand).
  Often carries a monthly fee and pays a low
  (or no) rate of interest
 Savings account – higher rate of interest
  than the chequing account and is intended
  for short-term savings
Types of Deposits
   Term deposits – depositor leaves the money
    with the bank for a fixed amount of time. Range
    from 1 day to 5 years, minimum investment
    usually $1000
   Guaranteed investment certificates (GICs) –
    depositor leaves the money with the bank for a
    fixed term, minimum deposit is usually $5000,
    higher rate of interest than term deposits
Types of Deposits
   Mutual funds - professionally-managed
    form of collective investments that pools
    money from many investors and invests it
    in stocks, bonds, short-term money market
    instruments, and/or other securities.
Canadian Banks vs US Banks
   The system in Canada is referred to as branch
    banking.
     Branch banking – a system of banking in which a
      commercial bank is allowed to operate branches of
      the main bank.
   In Canada there are 8 domestic chartered
    banks. Foreign banks are allowed to operate in
    Canada, but they are not allowed to have an
    extensive system of branches like Canadian
    banks.
Canadian Banks vs US Banks
   The system in the USA is unit-banking.
     Unit banking – the system in which commercial banks
      are either not allowed to operate branches or allowed
      to operate only a limited number.
   There are no banks with offices all across the
    country. Some banks regulated by federal law;
    others regulated by state law. Some states allow
    branches, but they are usually within a restricted
    area. The U.S. has more than 13 000
    commercial banks.
Asset
Rank                                Country (Year                Assets
2006    Bank                           End)             ($millions CDN)

 1      UBS                        Switzerland(12/06)         2,288,498

 2      Barclays Bank                 U.K. (12/06)            2,280,243

 3      BNP Paribas                 France (12/06)            2,210,498

 4      Citigroup                     U.S. (12/06)            2,193,743

 5      HSBC Holdings                 U.K. (12/06)            2,168,341

 6      Credit Agricole Group       France (12/06)            2,118,913

 7      Royal Bank of Scotland        U.K. (12/06)            1,993,482

        Mitsubishi UFJ Financial
 8                                   Japan (03/07)            1,840,463
        Group

 9      Deutsche Bank               Germany(12/06)            1,728,429

 10     Bank of America Corp          U.S. (12/06)            1,701,032

 40     Royal Bank of Canada        Canada(10/06)              557,147

 47     Toronto-Dominion Bank       Canada(10/06)              407,822

 49     Scotiabank                  Canada(10/06)              393,387

 56     Bank of Montreal            Canada(10/06)              324,622

 58     CIBC                        Canada(10/06)              315,519

109     Desjardins Group            Canada(12/06)              135,126

119     National Bank of Canada     Canada(10/06)              117,454