L8. Investment Banking, Insurance, and Other Sources of Fee Income
Managing Non-Deposit Liabilities
Chapter 12
Transaction Deposit
An Account Used Primarily to Make Payments for Purchases of Goods and Services
Types
Noninterest-Bearing Demand Deposits
Interest-Bearing Demand Deposits
NOW
MMDA
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Thrift or Savings Deposit
An Account Whose Primary Purpose is to Encourage the Bank Customer to Save Rather than Make Payments
Types
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Passbook Savings Account
• Statement Savings Deposit
• Time Deposit (CD)
• Individual Retirement Account (IRA)
• Keogh Deposit
• Roth IRA
Core Deposits
A Stable Base of Funds that is Not Highly sensitive to Movements in Market IR and which tend to Remain with the bank
Cost Plus Profit Deposit Pricing
Unit price charged the customer for each deposit service = Operating exp per unit of deposit service + Estimated overhead exp allocated to the deposit service function + Planned PM from each service unit sold
Chapter 13
Nondeposit Sources of Funds
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Federal Funds Market
• Repurchase Agreements
• Federal Reserve Bank
• Advances from the Federal Home Loan Bank
• Negotiable CDs
• Eurocurrency Deposit Market
• Commercial Paper
• Long Term Sources
Primary Credit
Secondary Credit
Seasonal Credit
Domestic
Euro
Yankee
Thrift
Industrial Paper
Finance Paper
Chapter 14
Risk and Return With Traditional
and Nontraditional Services
