Bank as part of the banking system. Types of banks
Category: Concept of the Bank and the Banking System
The Bank is a member of the banking system. This means that it should:
1) have such generic properties that allow it to be an organic part of the whole (to have the status of the bank, the license for banking operations), operate under the general rules of the game;
2) operate within the general and specific laws of the legal norms of society;
3) be capable of self-regulation (responding and adapting to the environment), development and improvement;
4) interact with other elements of the banking system.
In addition to banks in the banking system includes some special financial institutions that perform banking transactions, but do not have the status of the bank, other institutions that make up the banking infrastructure and providing the support of monetary institutions.
For all the unity of the essence of the bank’s practice of operating many of their species.
Differ primarily in emission and commercial banks. Since the subject of this tutorial is to introduce the activities of commercial banks, we do not set ourselves the task of a detailed description of the work of central banks, which are designed to solve the problem of emission of cash money. We select only those criteria that can be in a variety of commercial banks to allocate their individual styles.
By the nature of the operations are different universal and specialized banks. The universal banks decided to refer those who are capable of «one-stop» to perform a wide variety of operations and services. Universality, however, has other shades. «Universality» means the type of activity, not limited to:
by branches of national economy;
on the composition of clientele served;
quantitatively;
by region.
Universal bank lending tends to be diverse industries, while specialized bank is most often associated with lending to any sector (subsector) of the national economy, a group of enterprises (for example, some banks cater mostly just forest, road, air, hours and other sub-sectors of industry).
Even more significantly affected by a universal type of bank in respect of client service. Typical for the universal bank is when it serves, and legal and natural persons. In contrast, a specialized bank may withdraw only at the service of individuals.
Terms of operations performed by a universal bank, as a rule, is extremely broad. Quantitative indication here is a list of permitted operations, which includes the open-market operations, where the bank can act as a full participant in the securities market to invest their capital in the capital of other enterprises. For example, the number of U.S. commercial banks, as a specialized, in accordance with banking legislation can not perform these operations. Universal banks of the European countries, by contrast, can perform such operations.
The activities of universal banks is not confined to any one region. Universal Bank is present in the regions in a variety of areas, has branches, including overseas. The activities of a specialized bank, by contrast, is often local in nature.
In modern banking institutions sometimes difficult to distinguish the type of universal and specialized banks. Often, for example, large specialized mortgage banks are not confined only to one region, may have branches abroad, provide hundreds of services to its customers. We can say that the activities of commercial banks can often be seen features of both universal and specialized banks.
By type of ownership are classified as state banks, joint, cooperative, private or mixed.
In the transition state form of ownership of the bank retains its value. Though not on such a scale as in the distribution system management, where only the state has a monopoly on the creation of the bank, but in the present conditions in a number of state banks remains a stake in the banks.
State ownership is present in the banking sector and other modified forms. Banks, for example, can be created on the basis of the state. In international practice, banks are full of competent state (they can be joint-stock banks) to finance government programs for economic development. Commercial Bank’s shareholders may also be state-owned enterprises, in connection with which this form of ownership can actually be present in the capital of commercial banks.
In an economic crisis and disorder of the banking system, the state seeks to strengthen its influence in the banks. Government regulation not only leads to a tight monetary policy, raising reserve requirements, liquidity, but also to the formation of special credit institutions, with a predominance of state ownership in the banking capital. Such banks in the world is often called development banks
In the market economy the most typical form of ownership of the commercial bank is a joint-stock form (an international language it is often called the private form, since the establishment of the bank’s capital attended mostly private companies and individual private individuals).
In some countries, a significant fraction of the total number of credit institutions occupy the so-called small-scale credit institutions. These include credit cooperatives, mutual credit societies, savings and loan banks, building-savings banks, etc. The advantages of the monetary institutions should include their ability to work with small enterprises, support small and medium-sized businesses, and accumulate small savings mobilize them to local needs. According to the service sector banks can be divided into regional (local), inter-regional, national and international. The regional banks are banks that cater mainly to local customers, clients of one of the region. These include municipal and banks that serve the needs of a particular region (the city). Inter-regional banks serving the needs of several regions. National Bank — a bank doing business within the country and serve primarily the needs of clients in their countries, international banks mainly serve the communication clients from different countries.
On the number of bank branches are divided into non-branch and multi-branch. Increase in the number of branches occurs on the basis of the parent bank, is expanding its network and based on the conversion of a number of independent banks into branches of other more powerful lending institutions.
Depending on the industries served by the banks can be divided into multi-serving and predominantly one of the branches. In international practice, you can meet industrial banks, merchant banks.
In international banking practice, there are other criteria of classification. In the U.S. system is installed dual subordination, there is a group of banks belonging to the Federal Reserve, and banks, regulated by individual states, on the relationship with insurance are banks, whose deposits are insured by the Federal Deposit Insurance Corporation and are not insured there.