An Informal Link Between The Level Of Financial Intermediation And Economic Development

Union Bank of Colombo PLC (“UBC or “the Bank”) was established in the year 1995 as the eighth local commercial bank in Sri Lanka. UBC was Sri Lanka’s rapid fastest expanding growing banks within the recent new entrants that offered a wide range of financial solutions with the latest technology innovations during its initial period. At the inception, the Bank was focusing on a niche market mainly consisting of a high net worth clientele. UBC continued to increase its accessibility and reach, through its network expansion and technology driven products, which were innovative and in most cases was “first” in the industry. (Refer Appendix IV). UBC continues to deliver convenience and

Banking industry is currently operating in the maturity stage. There are many players as a result of which the competition is quite high. Competition is broadly based on the levels of fees charged, reputation, the range of services and products provided. As the industry consolidates and the range of services broadens, the size and geographic spread of industry players in increasing. Providing a high set of barriers is the capital and regulatory requirements within the banking sector. Entities that want to start up as a commercial bank and/or investment bank or securities dealer face significant establishment costs in order to gain acceptance and meet market reputation. Furthermore, start-ups require up-front expenses in order to establish proper distribution channels. Globalization is high and the trend is increasing. Cross-border sales and acquisitions of banking operations are also occurring, as assets are shuffled in the race to raise capital.

This research essay is done for the purpose to compare and contrast the financial system between two countries chosen which are Australia and Singapore. This research essay is mainly concentrate on different types of institutions in the financial system and the role they play. Moreover, the different types of institutions in different countries will then compare in order to analyze the similarity and differences.

C) decreases the amount of funds that business firms can raise by selling newly-issued stock.

As the title of the article elucidates, the author’s purpose for writing this article was to expose and clarify the inherent risks associated with banking and financial sectors of the economy. People over all have the tendency to be protective of the thing they have earned, money is not different. As the general public’s knowledge of finance and general investing is, for the most part, limited, they will, at one time or another, trust their earnings to a financial institution. The author defines

Table 4 summarises descriptive statistics of RATE, the un-weighted (weighted) risk disclosure index (RDI) as well as SSB for all bank fiscal years, as well as for each of the eight firm years investigated, separately from 2006 to 2013. Table 4 shows a number of remarkable outcomes. First, it reports that there is a high amount of variation in ratings between banks. For instance, RATE ranges from a minimum of 1 (Default) to a maximum of 19 (AA- which mean very high credit quality) with the median RATE 14.12 (Good credit quality) that indicate most banks in MENA have good rating, but there has been a continuous decreases in ratings during 2008 and years after which reflects the impact of continues crises beginning with GFC in 2007 and credit crunch in 2010. For instance, the average banks ratings is 14.4, 14.29, 14.09, 13.77, 13.69 and 13.84 in 2008, 2009, 2010, 2011 and 2012, but RATE begin to increases in 2013 which indicates recovery in MENA banks from GFC crisis effects. Finally, there is evidence that the level of listed bank RATE before GFC is higher than during and after GFC.

They interpret financial intermediaries as information sharing coalitions. Diamond (1984) shows that these intermediary coalitions can achieve economies of scale. Diamond (1984) is also of the view that financial intermediaries act as delegated monitors on behalf of ultimate savers. Monitoring will involve increasing returns to scale, which implies that specializing may be attractive. Individual households will delegate the monitoring activity to such a specialist, i.e. to the financial intermediary. The households will put their deposits with the intermediary. They may withdraw the deposits in order to discipline the intermediary in his monitoring function. Furthermore, they will positively value the intermediary’s involvement in the ultimate investment (Hart, 1995). Also, there can be assigned a positive incentive effect of short-term debt, and in particular deposits, on bankers (Hart and Moore, 1995). For example, Qi (1998) and Diamond and Rajan (2001) show that deposit finance can create the right incentives for a bank’s management. Liquid assets of the bank result in a fragile financial structure that is essential for disciplining the bank manager. Note that in the case households that do not

More banks would be likely to adopt this attitude, which could cause bank failures due to the risk taken, and the failure of a large number of banks could stretch the resources of the Deposit Insurance Scheme to the point where it is unable to meet its obligations to the depositors, thus undermining the faith of the public in the system. This potential of moral hazard can be mitigated by limiting coverage of deposits, either by amount, or number and so on, so as to prevent bankers from being fully absolved of the consequences of the risks taken. Further, a deposit insurance scheme, in an economy that has not stabilized, can end up straining the resources of the

Banking system is the most important component in the financial system in each and every country. As well, in Sri Lanka, bank industry is the major influencing industry to Sri Lankan economy. Therefore the Sri Lankan Government has identified, it is essential to stable the financial sector in order to achieve the objective of increasing the Per Capita Income beyond US $ 4000 by 2016.

Banks are mainly regulated by the Central Bank of Sri Lanka (CBSL) - the apex financial regulator, under the Banking Act No. 30 of 1988, Monetary Law Act No. 58 of 1946 and Exchange Control Act No. 24 of 1953. Since it is mandatory for banks to be listed, regulations issued by Securities and Exchange Commission (SEC) are also directly applicable. But it is important to remember that managing regulatory risk is not limited to the regulations of CBSL and SEC, but extends to all the applicable local and international regulations such as labour laws, environmental laws, antitrust laws and tax regulations

In contrast to the barter economy, the financial sector sits between savers and borrowers: taking funds from depositors and making loans to borrowers, linking together households, companies, and governments. As such, financial sector could allocate the surplus funds in the society to their most efficient use in the needed areas (Diamond, 1984). For example, the credit provision to SMEs fuels real business to invest in new buildings and machineries to foster their growth. In this way, financial sector benefits the nation by expanding the whole society’s productive capacity, then improving people’s living standards eventually. Third, a well-run financial system facilitates the management and allocation of certain risks (Baily & Elliott, 2013). Financial intermediaries have

Financial Institutions or banks are very important and valuable for the sake of the economic growth of an economy (Gup, 1999). Therefore, the government of almost every country of the world likes to execute their growth through the existence of financial institutions. Apart from the financial institutions, there is yet another thing that needed to be there in an economy known as Financial Markets (Gup, 2003). This assignment is a Financial Market based assignment in which different provisions and elements of the financial markets would have been acknowledged and analyzed. There are three different parts of the assignment which further bifurcated into different answers.

List of abbreviations List of tables Acknowledgements Abstract 1. 2. 3. 4. 5. 6. 7. 8. Introduction Problem statement Objectives and hypothesis of the study Literature review Structure and performance of the financial sector in

I, Miss. Sarmistha Sasmal, the student of M.Com (Banking & Finance)(Semester-I), from The Sydenham College Of Commerce & Economics, hereby declare that I have completed this project on INTERNATIONAL BANKING, in the academic year 2012-2013 .

mechanisms in the last decade in both developed and developing nations. The banking sector in