Additional Information
Book Details
Abstract
Introduction to Banking 2nd Edition is a thoroughly revised edition of the book first published in 2006. It offers a comprehensive insight into the business of banking, providing up-to-date information about the impact of the financial crisis upon the banking sector globally and the far-reaching regulatory reforms. Written by expert authors, this book covers both theoretical and applied issues relating to the global banking industry, highlighted by examples from across Europe and the wider international arena. It is organised into five main sections including a brand new section - advanced topics in banking.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover | Cover | ||
| Title Page | iii | ||
| Copyright | iv | ||
| Contents | vii | ||
| List of figures | xiii | ||
| List of tables | xvii | ||
| List of boxes | xx | ||
| Preface | xxiii | ||
| Acknowledgements | xxviii | ||
| List of abbreviations and acronyms | xxxv | ||
| Part 1 Introduction to banking | 1 | ||
| 1 What is special about banks? | 3 | ||
| 1.1 Introduction | 3 | ||
| 1.2 The nature of financial intermediation | 3 | ||
| 1.3 The role of banks | 7 | ||
| 1.4 Information economies | 8 | ||
| 1.5 Why do banks exist? Theories of financial intermediation | 14 | ||
| 1.6 The benefits of financial intermediation | 16 | ||
| 1.7 Conclusion | 17 | ||
| Key terms | 18 | ||
| Key reading | 18 | ||
| Revision questions and problems | 19 | ||
| 2 Bank activities and services | 20 | ||
| 2.1 Introduction | 20 | ||
| 2.2 What do banks do? | 20 | ||
| 2.3 Banks and other financial institutions | 21 | ||
| 2.4 Banking services | 25 | ||
| 2.5 Sustainable and ethical banking: a brief overview | 42 | ||
| 2.6 Conclusion | 45 | ||
| Key terms | 46 | ||
| Key reading | 46 | ||
| Revision questions and problems | 46 | ||
| 3 Types of banking | 47 | ||
| 3.1 Introduction | 47 | ||
| 3.2 Traditional versus modern banking | 48 | ||
| 3.3 Retail or personal banking | 53 | ||
| 3.4 Private banking | 59 | ||
| 3.5 Corporate banking | 61 | ||
| 3.6 Investment banking | 72 | ||
| 3.7 Islamic banking | 78 | ||
| 3.8 Conclusion | 81 | ||
| Key terms | 81 | ||
| Key reading | 82 | ||
| Revision questions and problems | 82 | ||
| 4 International banking | 83 | ||
| 4.1 Introduction | 83 | ||
| 4.2 What is international banking? | 83 | ||
| 4.3 Brief history of international banking | 86 | ||
| 4.4 Why do banks go overseas? | 87 | ||
| 4.5 Types of bank entry into foreign markets | 94 | ||
| 4.6 International banking services | 99 | ||
| 4.7 Conclusion | 112 | ||
| Key terms | 113 | ||
| Key reading | 114 | ||
| Revision questions and problems | 114 | ||
| Appendix 4.1 Syndicated lending: a selected glossary | 115 | ||
| Part 2 Central banking and bank regulation | 119 | ||
| 5 Theory of central banking | 121 | ||
| 5.1 Introduction | 121 | ||
| 5.2 What are the main functions of a central bank? | 122 | ||
| 5.3 How does monetary policy work? | 123 | ||
| 5.4 Monetary policy functions of a central bank | 127 | ||
| 5.5 Why do banks need a central bank? | 145 | ||
| 5.6 Should central banks be independent? | 149 | ||
| 5.7 Conclusion | 151 | ||
| Key terms | 152 | ||
| Key reading | 152 | ||
| Revision questions and problems | 153 | ||
| 6 Central banks in practice | 154 | ||
| 6.1 Introduction | 154 | ||
| 6.2 The Bank of England | 154 | ||
| 6.3 The European Central Bank (ECB) | 168 | ||
| 6.4 The Federal Reserve System | 178 | ||
| 6.5 Conclusion | 186 | ||
| Key terms | 187 | ||
| Key reading | 188 | ||
| Revision questions and problems | 188 | ||
| 7 Bank regulation and supervision | 189 | ||
| 7.1 Introduction | 189 | ||
| 7.2 The rationale for regulation | 190 | ||
| 7.3 Types of regulation | 191 | ||
| 7.4 The financial safety net | 192 | ||
| 7.5 Limitations of regulation | 202 | ||
| 7.6 Causes of regulatory reform | 205 | ||
| 7.7 Bank capital regulation | 206 | ||
| 7.8 Conclusion | 225 | ||
| Key terms | 225 | ||
| Key reading | 225 | ||
| Revision questions and problems | 226 | ||
| 8 Bank failures and banking crises | 227 | ||
| 8.1 Introduction | 227 | ||
| 8.2 The determinants of bank failure | 228 | ||
| 8.3 Early warning systems for bank soundness | 233 | ||
| 8.4 Bank restructuring | 239 | ||
| 8.5 Banking crises | 246 | ||
| 8.6 Conclusion | 255 | ||
| Key terms | 255 | ||
| Key reading | 255 | ||
| Revision questions and problems | 256 | ||
| Part 3 Issues in bank management | 257 | ||
| 9 Banks' balance sheet and income structure | 259 | ||
| 9.1 Introduction | 259 | ||
| 9.2 Retail banks' balance sheet structure | 260 | ||
| 9.3 Investment banks' financial statements | 274 | ||
| 9.4 Bank performance and financial ratio analysis | 279 | ||
| 9.5 Conclusion | 294 | ||
| Key terms | 294 | ||
| Key reading | 294 | ||
| Revision questions and problems | 295 | ||
| 10 Bank financial management | 296 | ||
| 10.1 Introduction | 296 | ||
| 10.2 Asset–liability management (ALM) | 297 | ||
| 10.3 Liquidity management and the importance of reserves | 302 | ||
| 10.4 Capital adequacy management | 303 | ||
| 10.5 Off-balance-sheet (OBS) business in banking | 303 | ||
| 10.6 Loan sales and the process of securitisation | 307 | ||
| 10.7 Derivative business in banking | 310 | ||
| 10.8 Conclusion | 327 | ||
| Key terms | 327 | ||
| Key reading | 328 | ||
| Revision questions and problems | 328 | ||
| 11 Banking risks | 329 | ||
| 11.1 Introduction | 329 | ||
| 11.2 Credit risk | 329 | ||
| 11.3 Interest rate risk | 332 | ||
| 11.4 Liquidity (or funding) risk | 336 | ||
| 11.5 Foreign exchange risk | 339 | ||
| 11.6 Market (or trading) risk | 342 | ||
| 11.7 Country and sovereign risk | 344 | ||
| 11.8 Operational risk | 346 | ||
| 11.9 Off-balance-sheet risk | 346 | ||
| 11.10 Other risks | 347 | ||
| 11.11 Capital risk and solvency | 348 | ||
| 11.12 Interrelation of risks | 349 | ||
| 11.13 Conclusion | 350 | ||
| Key terms | 351 | ||
| Key reading | 351 | ||
| Revision questions and problems | 351 | ||
| 12 Bank risk management | 352 | ||
| 12.1 Introduction | 352 | ||
| 12.2 General risk management | 353 | ||
| 12.3 Credit risk management | 359 | ||
| 12.4 Managing the lending function | 362 | ||
| 12.5 Managing interest rate risk | 369 | ||
| 12.6 Managing liquidity risk | 376 | ||
| 12.7 Managing market risk | 378 | ||
| 12.8 Managing operational risk | 384 | ||
| 12.9 International risk assessment | 388 | ||
| 12.10 Conclusion | 395 | ||
| Key terms | 395 | ||
| Key reading | 396 | ||
| Revision questions and problems | 396 | ||
| Part 4 Comparative banking markets | 397 | ||
| 13 Banking in the UK | 399 | ||
| 13.1 Introduction | 399 | ||
| 13.2 The crisis in UK banking | 400 | ||
| 13.3 Regulatory reforms and the changing face of UK banking | 409 | ||
| 13.4 The structure of the UK banking sector | 417 | ||
| 13.5 Financial structure of the UK banking sector | 422 | ||
| 13.6 Balance sheet features and the performance of UK banks | 427 | ||
| 13.7 The UK payment system | 431 | ||
| 13.8 Competition in UK banking | 433 | ||
| 13.9 Conclusion | 438 | ||
| Key terms | 438 | ||
| Key reading | 439 | ||
| Revision questions and problems | 439 | ||
| Appendix 13.1 Demutualisation of the UK building society sector | 440 | ||
| 14 Banking in Europe | 441 | ||
| 14.1 Introduction | 441 | ||
| 14.2 The European Union | 442 | ||
| 14.3 The Single European Market for financial services | 446 | ||
| 14.4 Building a new EU financial architecture | 454 | ||
| 14.5 Structural features and the consolidation trend | 474 | ||
| 14.6 Balance sheet structure and performance in European banking | 484 | ||
| 14.7 Conclusion | 489 | ||
| Key terms | 489 | ||
| Key reading | 490 | ||
| Revision questions and problems | 490 | ||
| 15 Banking in the US | 491 | ||
| 15.1 Introduction | 491 | ||
| 15.2 The financial crisis in the US | 492 | ||
| 15.3 Structure of the US banking and financial systems | 499 | ||
| 15.4 US payments systems | 507 | ||
| 15.5 Balance sheet features of US commercial banks | 510 | ||
| 15.6 Performance of US commercial banks | 510 | ||
| 15.7 Regulation of the US banking system | 515 | ||
| 15.8 Conclusion | 524 | ||
| Key terms | 525 | ||
| Key reading | 525 | ||
| Revision questions and problems | 526 | ||
| 16 Banking in Japan | 527 | ||
| 16.1 Introduction | 527 | ||
| 16.2 Structure of the banking system | 528 | ||
| 16.3 Payment systems | 538 | ||
| 16.4 Banking crises in Japan | 542 | ||
| 16.5 Changing structure of the financial system | 545 | ||
| 16.6 Conclusion | 552 | ||
| Key terms | 553 | ||
| Key reading | 553 | ||
| Revision questions and problems | 553 | ||
| 17 Banking in emerging markets | 554 | ||
| 17.1 Introduction | 554 | ||
| 17.2 Benchmarking financial development | 555 | ||
| 17.3 Finance and growth | 560 | ||
| 17.4 The macroeconomic outlook | 564 | ||
| 17.5 Structural features and trends | 570 | ||
| 17.6 Conclusion | 585 | ||
| Key terms | 586 | ||
| Key reading | 586 | ||
| Revision questions and problems | 586 | ||
| Part 5 Advanced topics in banking | 587 | ||
| 18 Banks and markets | 589 | ||
| 18.1 Introduction | 589 | ||
| 18.2 Bank intermediation, markets and information | 590 | ||
| 18.3 The development of the securitisation market | 593 | ||
| 18.4 Modern securitisation process | 598 | ||
| 18.5 The 'new wave' of securitisation | 604 | ||
| 18.6 Types of securitisation | 606 | ||
| 18.7 Securitisation, credit-rating agencies and monoline insurers | 607 | ||
| 18.8 The future of securitisation | 611 | ||
| 18.9 Conclusion | 614 | ||
| Key terms | 614 | ||
| Key reading | 615 | ||
| Revision questions and problems | 615 | ||
| 19 Mergers and acquisitions | 616 | ||
| 19.1 Introduction | 616 | ||
| 19.2 Mergers and acquisitions: definitions and types | 617 | ||
| 19.3 Recent trends in bank M&As | 621 | ||
| 19.4 M&A and bank performance | 629 | ||
| 19.5 Managerial motives for M&As | 632 | ||
| 19.6 The impact of M&As on bank customers | 633 | ||
| 19.7 M&As and bank diversification | 634 | ||
| 19.8 The exploitation of safety-net subsidies and systemic risk | 637 | ||
| 19.9 Conclusion | 642 | ||
| Key terms | 642 | ||
| Key reading | 642 | ||
| Revision questions and problems | 643 | ||
| 20 Bank competition and financial stability | 644 | ||
| 20.1 Introduction | 644 | ||
| 20.2 Structure-conduct-performance (SCP) | 645 | ||
| 20.3 Non-structural measures of banking sector competition | 653 | ||
| 20.4 Comparing competition measures – are they consistent? | 660 | ||
| 20.5 Competition and risk in banking | 662 | ||
| 20.6 Bank competition and stability | 664 | ||
| 20.7 Conclusion | 667 | ||
| Key terms | 667 | ||
| Key reading | 668 | ||
| Revision questions and problems | 668 | ||
| Appendix A1 Interest rates, bonds and yields | 669 | ||
| Appendix A2 Introduction to portfolio theory | 679 | ||
| Glossary | 689 | ||
| References and further reading | 725 | ||
| Index | 749 |