Chapter 2 - The banking sector. After studying this chapter you will be able to: Evaluate the functions and activities of commercial banks, identify the main sources and uses of funds and reasons for changes, analyse the importance of changes in the role of banks on the financial system, | Chapter 2 The Banking Sector Websites: Learning Objectives Evaluate the functions and activities of commercial banks Identify the main sources and uses of funds and reasons for changes Analyse the importance of changes in the role of banks on the financial system Learning Objectives (cont.) Examine the market structure of the banking sector Outline the nature and importance of banks off-balance-sheet (OBS) business Consider the regulation and prudential supervision of banks Chapter Organisation Introduction Functions of Banks Sources of Funds Uses of Funds Off-balance-sheet Business Regulation and Prudential Supervision Summary Introduction Banking Act 1959 (Cwlth) Authorises a financial institution to operate as a bank Three categories of banks Incorporated banks: domestic and foreign Unincorporated foreign bank branches Foreign bank representative offices Introduction (cont.) Importance of banks Largest share of assets of all institutions Share declined 1950s to mid-1980s due to regulation which constrained development of banks supported evolution and growth in NBFIs Role in international financial markets Increase in managed funds activities and OBS business Introduction (cont.) Chapter Organisation Introduction Functions of Banks Sources of Funds Uses of Funds Off-balance-sheet Business Regulation and Prudential Supervision Summary Functions of Banks Asset management (−1980s) Loans portfolio is tailored to match the available deposit base Liability management (1980s−) Deposit base and other funding sources are managed to fund loan demand Commercial bill market Provision of other financial services OBS Chapter Organisation Introduction Functions of Banks Sources of Funds Uses of Funds Off-balance sheet Business Regulation and Prudential Supervision Summary Sources of Funds Sources of funds . | Chapter 2 The Banking Sector Websites: Learning Objectives Evaluate the functions and activities of commercial banks Identify the main sources and uses of funds and reasons for changes Analyse the importance of changes in the role of banks on the financial system Learning Objectives (cont.) Examine the market structure of the banking sector Outline the nature and importance of banks off-balance-sheet (OBS) business Consider the regulation and prudential supervision of banks Chapter Organisation Introduction Functions of Banks Sources of Funds Uses of Funds Off-balance-sheet Business Regulation and Prudential Supervision Summary Introduction Banking Act 1959 (Cwlth) Authorises a financial institution to operate as a bank Three categories of banks Incorporated banks: domestic and foreign Unincorporated foreign bank branches Foreign bank representative offices Introduction (cont.) .
