The Differences Between Theu.s And China Banking Systems Essay

The twenty year charter placed on the First Bank of the United States was done to quell/mitigate the worries of many Americans that a national bank was unconstitutional and would provide too much power to the central government, because once the twenty year period is up, the American people and congress can evaluate the bank’s performance and decide if it served all of its purpose accordingly, and if not, they could choose to not renew the charter for the bank. This exact mechanism/method of mitigating corruption was placed on the Second Bank of the United States, and at the end of its twenty year charter, it was clear that the bank had served to regulate and stabilize the United States’ economy by providing loans to citizens to start businesses, farms, plantations, providing opportunities for international investments and profits; which all served to strengthened the national economy and defense of the

Throughout history the Canadian and American banking systems have always taken separate approaches to the financial sector. There are many factors that influence the differences between the banking systems, some of which including their banking regulations, customer base and the chosen style of banking. All the factors presented have influenced the results of the banking sectors in both countries. Both systems have pros and cons, however the argument presented will reflect and support the benefits and success of the Canadian banking system and its ability to support the Canadian economy throughout the country’s history.

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).

The American economy is a complex balance of services, financial, manufacturing, agricultural, and banking industries. For this reason, the U.S. is a global economy, relying upon foreign investments and trade to create and retain wealth. Over the years, America has evolved from farming-based, to industrial, to a services-based economy. As a result, the banking system from its inception has weathered the many growing pains associated with a new government and currency, instituting regulations and a centralized bank to examine the economy, and implement policies intended to offset factors negatively affecting the general financial health of the country.

Before the advent of the Federal Deposit Insurance Corporation (FDIC) in 1933 and the general conception of government safety nets, the United States banking industry was quite different than it is today. Depositors assumed substantial default risk and even the slightest changes in consumer confidence could result in complete turmoil within the banking world. In addition, bank managers had almost complete discretion over operations. However, today the financial system is among the most heavily government- regulated sectors of the U.S. economy. This drastic change in public policy resulted directly from the industry’s numerous pre-regulatory failures and major disruptions that produced severe economic and social

The famous saying “opposites attract” may be true in the game of love, but not in the game of politics. When it comes to Alexander Hamilton and Thomas Jefferson, their political opinions are the exact opposite including their views on banking. Even though Hamilton’s and Jefferson’s views on central banking in the United States are the exact opposite, they have similarities and differences. This paper will inform the reader on Hamilton’s and Jefferson’s views on central banking by defining them and explaining their relations. Both views on banking are very distinct and detailed, but they have differences. Although their views on banking are different, there are some similarities.

Investments as in the case of Chinalco's bid for Rio-Tinto, allowed China to expand its economy. China's state-owned and state-controlled banks were able to weather the economic crisis of 2008 and 2009 in contrast to many western countries. The state could force Chinese banks to start lending money again, without having to wait for the banks to do it on their

Whether a reader agrees or disagrees with how the centralized banking system was created, the foundation for which it was built off of has continued to grow over a century with key fundamentals still in place today. The author’s implications demonstrate that an economists, the intellectuals, were responsible for the banking reform that led to a structured banking system. Could this all have been possible without the influence of the economists? In my opinion, the author has provided enough evidence that would allow the reader to properly analyze and have confidence in the integrity of the article.

in the US, upper, middle, and lower. They are determined by money, the rich are

China’s financial markets are still fairly primitive however China has one of the highest saving rates in the world. This is Largely due to rising incomes, but also due to the lack of a robust social safety net to protect citizens from changing economic circumstances such as unemployment and population ageing. The banking sector was only opened to foreign competition at the end of 2006. This forced Chinese banks to become strong and efficient so as to compete with the international banks. In making the banks more efficient, state owned enterprises also had to increase their efficiency as they no longer were allowed to take low cost loans that were running at a loss for the state bank. These economic developments coupled with increased prudential standards and the improvement of lending practices has allowed for savings to be allocated efficiently for investment purposes, to support medium term growth in the Chinese economy.

The stock of the bank was bought and held mainly by the US government and numerous businessmen among the states of the Union. It paid interest on public debt, issue a national currency, dealt in foreign exchange, paid government officials, and numerous other tasks. It was both a private and public institution but if asked by the Treasury, it would have to open its books to inspection.

One of the most important actions that President Obama had done before he left office was the Paris Agreement. The Paris Agreement signified the new era of the world, one in which we had to address the problems before we can actually do something. Reducing carbon emissions have been at the focal point of pollution efforts/discussions. For the agreement to go into effect, 55 countries representing 55 % of the global emissions had to formally join. In September, the U.S. and China, countries that represent 40 percent of emissions, officially joined(citation). When you realize that China and the U.S. alone account for 40% of the emissions, that has to mean something more to people. Think about this, China has a population of about 1.35 billion people and the U.S. has a population of about 316.5 million; we are approx. 23% of China’s population, yet we account for approx. the same amount of emissions. If we take a look at the differences between pollution in China and the U.S. and take into account the number of people affected as a percentage of the total population, we can see that there are some major differences. This chart shows the top 10 polluted cities in the U.S versus the top 10 cities in China:

Ian Bremmer profoundly states that he did not witness a global financial crisis. He witnessed a financial crisis with Western, free market, countries while China was not phased because they are the owners of their banks. Additionally, he claims that when one confronts a Chinese citizen and asks of his or her opinion of their government, they are generally happy with their state; unlike their Western counterparts. Ian Bremmer quotes Chinese Premier Wen Jiabo’s definition of state capitalism, “The complete formulation of our economic policy is to give full play to the basic role of market forces in allocating resources under the macroeconomic guidance and regulation of the government. We have one important piece […] that both the visible hand and the invisible hand are given full play in regulating the market forces.” The Chinese government also ensures that they are creating thousands of new jobs each year to create an easier access from poverty to middle class without any social threats. Lastly, a key in China’s state capitalism market is that they have a strong grip and direction on their banking

As I have stated before bank regulations are in place to be the backbone of the U.S. economy. Therefore, we live in a system that affects us every day. Banks have certain requirements and instruments that help them stay open and be profitable. In the 1990s, interstate banking was finally permitted to create nationwide banks of unprecedented size. Congress 's also attempted to force banks to make home loans to people who had limited creditworthiness. These regulations are a major factor in why as many banks failing and disappearing today as we did pre Federal Reserve System.

As the article from (The Business Times, 2010) reported, in early January 2010 the government in China ordered banks to control lending following a stimulus-driven credit surge in mid-2009 and is trying to prevent over-investment in the economy.