Disadvantages Of Investment Banks

Commercial banks are institutions that conduct business for profit motive by accepting public deposits for various investment purposes.

Our Internet Banking Solutions make it easier to control your payables and receivables. For instance, you can arrange to receive alerts when payments are due or pending your approval.

Imagine a world where phones actually complete your entire world. Where you don’t have to worry about cash to pay your bills; a swipe from your phone et voila! Your bill is paid. Imagine 1.2 billion Indians empowered with that kind of facility.

The banking industry has over the years evolved from simple to large and complex organization. They have grown from one street building into having multiple branches some of which are international. Their clients range from individual and institutions to governments and other banks. Banks do not manufacture physical things. Their work is simply services for money (Koch & MacDonald 2010). Such services include storing, lending and managing money. All people and institutions, as well as governments, need money to operate accordingly.

Lending institutions have been around since the late 1700’s. Banks are establishments that are authorized by the government to accept deposits, pay interest on deposits, clear checks, make loans, act as an intermediary in financial transactions and provide other financial services to customers.

[A. Fees are displayed when you take money out of an ATM. Terms and conditions must be explained to the consumer when funds are withdrawn from an account. Disclosures must be written in comprehensible language. Any change in terms must be communicated to the consumer within 21 days of the change taking effect. Financial institutions are required to provide consumers with statements for electronic transactions. Any of these is acceptable.]

Investment Banking is now at a crucial junction, where Investment and Commercial Banking are splitting up due to the ring fence which is being built around these two banking areas. As well, the new upcoming regulation, Basel III, will have a huge impact in the investment banks, with higher liquidity and capital requirements, in order to increase solvency and stability in financial industries.

d) Electronic Fund Transfer. Electric funds transfer (EFT) provides for payments and collections by transferring financial information electronically. PayPal offer online payments and money transfer among businesses and individuals, nationally and internationally, in various currencies, requiring only that recipients have an e-mail address.

Electronic Financial Systems (EFS), a subsidiary of JPMorgan Chase, focuses on providing customers electronic benefit transfer (EBT) services. EBT is a well-known financial service allowing U.S. recipients to acquire government benefits through a single debit card solution. EFS’s mission is to maintain a top position in the EBT marketplace by providing superior services along with the most widespread debit card network. The needs of EFS are to maintain a stable, industry standard system that provides the very best service and support to its clients. This includes, so as to ensure exceptional customer satisfaction, that the organization provide assurances that funding be provided timely, accurately, and with the greatest of security

Investment Banker: An intermediary who arranges the sale of stock and bonds to raise capital for corporations. Also involved in arranging mergers and acquisitions of companies.

The main purpose that banks have been serving since their inception is keeping our money safe for us. While keeping our money safe, they also let us earn a certain amount of interest on the money deposited with them. Traditional banks have been doing this, and internet banks continue the same function. The only difference is in the way the transactions are made.

The investment banks, and subsequent stock brokerage firms, was regulated by the Security and Exchange Commission. The banking entities, in this portion of the financial sector, were used to dealing in high risk business that were structured on the business’ equity and debt capital, instead of the commercial banks’ deposits of customers. The activities in this sector of the financial system were underwriting stocks and bonds, insurance markets, the investments in subprime debt markets and mortgages.

Banks make their profits and cover their expenses simply by charging borrowers more for loans than they pay depositors to keep their money in the bank. So simply put, charging high interest rates and distributing a low interest return. The intermediation function of banks is extremely important because it helped to finance the American economy.

Banks can be described as a financial institution where deposits are accepted and credited from the public. There are very essential in the financial systems as it influences the economy of a country. Most of the countries follow a system which is known as fractional reserve form of banking. Under this policy banks holds liquid assets which is equal to only a part of your current liabilities. These institutions are subjected to minimum capital standard which is called Basel Accords. Banks are specific place which will ensure that your finances are secured.

* Investment Banks (underwrites): provide advisory financial services, helped the companies price their offerings, underwrite the shares, and introduce them to investors, often in the form of a road show.