Banking Laws and Jurisprudence Reviewer

The fact that banks control 97% of the world's money supply makes them a vital institution. Banks are the engine of our modern financial system and a source for economic growth. The bank's ability to create credit can have destructive effects; the Great Depression of 1929 and the Great Recession of 2008. In both cases, banks spurred on an asset bubble through overextending credit to aid the purchase of assets. The result was an economic collapse that wiped out wealth and reduced credit creation which stalled productive investments. The lessons of the two great economic collapse support the notion proposed by the author, that bank credit for transactions that do not contribute to the economy should be restricted.

The Merriam Webster dictionary defines the noun “bank” as “an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds.” In essence it is an institution that serves as a medium of flow of funds between users and savers. A bank is a financial institution that links the flow of funds from savers to users and back. For the purpose of this audit report we will broadly classify banks into two major categories: commercial banks and investment banks.

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

Banks owe their customers a number of duties so long as the banker-customer relationship is formed . The banker-customer relationship will normally be governed by the law of contract. However,

In the document is also said that even when people have money in that bank people would go to the bank and go get their money since that bank was going to be a failed and it also said that after their failure the repressive effect on the spending of its clients. They couldn’t do anything to help the bank to crash even though they will all be crashed any day.

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

4. Discuss the tort action of “Interference with Contractual Relations and Participating in a Breach of Fiduciary duty” and, if the bank you’ve chosen were to behave as

First, an overview of the Twentieth Century American Banking System. Banking regulations are implanted to strengthen the banking sector and to eliminate bank panics. For example, the creation of the Federal Reserve System in 1913 was largely a response to lessons learned in the Panic of 1907. Industry regulation and structure, risk management viz. moral hazard, adverse selection.

Personal banking * Corporate banking * Premier banking * International banking * Private banking

Alexander Hamilton proposed using a banking system in America in 1781 after seeing how beneficial they were in other nations for advancing trade. In 1791, First Bank of the United States became the first commercial bank of the United States in Philadelphia, Pennsylvania. By the 1900’s, there were almost 170 banks per every million people in the United States, but because of this, there was a lot of debate about banking and the regulations needed and the fears that people had about the amount of control it was giving the government. This paper will be starting from the Great Depression and talk its way into the current situation of the United States banking regulations and why there is a debate on if there should be more or fewer regulations on banking.

Financial Institutions like Bank Solutions Inc. are required to meet the standards regulated by the government to avoid mismanagement of sensitive information. These regulations are solely purposed to mandate financial institutions to protect confidentiality, availability and integrity of individuals, information systems and processes. Some of the applicable regulations and standards are elaborated below:

When it comes to bank regulations their used to help us with all our needs when it comes to the many steps to handling a bank business and our economic power storage house. The U.S., banking is regulated at both the federal and state level. Depending on the type of charter a banking organization has and on its organizational structure, it may be subject to numerous federal and state banking regulations Apart from the bank regulatory agencies the U.S. maintains separate securities, commodities, and insurance regulatory agencies at the federal and state level. I will discuss Part 1002 - Reg B - Equal Credit Opportunity Act (ECOA) Compliance.

• Governance and oversight: Assessing business model and strategy changes and reinforcing the importance of sound corporate governance appropriate for the size and complexity of the individual bank. A specific focus will be on determining the adequacy of strategic, capital, and succession planning. Examiners will assess whether the plan is appropriate in light of the risks in new products or services. If applicable, examiners will assess the bank’s merger and acquisition processes and procedures.

These standards are conveyed to the staff on a normal basis. Insider trading guidelines have been established to ascertain that unpublished price sensitive information about the bank or any other company cannot be misused under any situation

Business Industry has witnessed the outcomes of bad moral decisions taken by business leaders. Enron’s story is only one example of corporate scandals and cases of bad moral decisions, which has not only shaken the public trust in corporations, but also affected the bank accounts of investors and employees. Before the bankruptcy of Enron; it was included in one of the fortune 500 companies after its fraudulent accounting case the share went down to $1 (Enron scandal, 2010; PBS, 2002; Godwin, 2006; Godwin, 2008).