Chapter 5: Banking & Financial Institution Flashcards
is a company engaged in the business of dealing with
financial and monetary transactions such as deposits,
loans, investments, and currency exchange.
Financial institutions
encompass a broad range of business operations
within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers.
Financial institutions
serve most people in some way, as financial operations are a critical part of any economy, with individuals and companies relying on financial institutions for transactions and investing.
Financial institutions
True or False
Governments do not consider it imperative to oversee and regulate banks and financial institutions because they do play such an integral part in the economy.
False
True or False
Historically, bankruptcies of financial institutions can create panic.
True
WHAT ARE THE 10 MAJOR TYPES OF FINANCIAL INSTITUTIONS?
- Central Banks
- Retail Banks
- Commercial Banks
- Internet Banks
- Credit Unions
- Savings Association
- Loan Association
- Investment Banks
- Brokerage Firms
- Insurance Companies
are the financial institutions responsible for the oversight and management of all other banks.
Central Banks
offered products to individual consumers
Retail Banks
worked directly with businesses
Commercial Banks
Products offered at ______________________include checking and savings accounts, certificates of deposit (CDs), personal and mortgage loans, credit cards, and business banking accounts.
retail and commercial banks
A newer entrant to the financial institution market is _______________, which work similarly to retail banks.
internet banks
________________ offer the same products and services as conventional banks, but they do so through online platforms instead of brick-and-mortar locations.
Internet banks
Under internet banks, there are two categories:
- Digital banks
- Neo-banks
are online-only platforms affiliated with traditional banks.
Digital banks
are pure digital native banks with no affiliation to any bank but themselves.
neobanks
is a type of financial institution providing traditional banking services and is created, owned, and operated by its members.
Credit unions
usually serve a specific demographic per their field of membership, such as teachers or members of the military. Some also open their membership to the general public.
Credit unions
Financial institutions that are mutually owned by their customers and provide no more than 20% of total lending to businesses
savings and loan associations