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Commercial BanK (Uses of funds (Bank Loans (Types of business loans, Loan…
Commercial BanK
Uses of funds
Cash
Banks must hold some cash as reserves to meet the reserve requirements enforced by the Fed
Investment in securities
Treasury and Agency Securities
Corporate and Minicipal Bonds
Mortgage-backed securities
Federal funds sold
Repurchase agreements
Eurodollar loans
Fixed assets
Bank Loans
Types of business loans
Loan Participations
Loan supporting leveraged Buyouts
Types of Consumer Loans
Real Estate Loans
Typical off-balance sheet activities
Loan Commitments
Standby letter of credit
Forward contracts on currencies
Credit default swap contracts
Interest rate swap contracts
Sources of funds
Deposit Accounts
Transaction Deposits
Saving Deposits
Time Deposits
Money market deposit accounts
Borrowed Funds
Federal funds purchased
Repurchase agreement
Borrowing from the Federal Reserve Banks
Eurodollar borrowings
Long-term Sources of Funds
Bonds issued by the bank
Bank capital
Definition and Functions
Definition
Banks are those financial institutions that offer the widest range of financial servives
Functions
Thrift or saving function
Credit function
Payments functions
Cash management fuction
Insurance function
Brokerage function
The guarantor function
Investment banking