The Central Bank of America Federal Reserve System

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Central bank is the main bank of any country. It deals with the money supply, inflation deflation and issuance of currency. Every country has only one central bank which is called the head of all other commercial banks. The currency which central bank issue is acceptable in whole country; there would be no other currency acceptable. It also controls the interest rate.

Here are some names of the central banks of different countries: Federal Reserve System (USA), State Bank of Pakistan (Pakistan), Central Bank of India (India), Reserve Bank of Australia (Australia) etc.

Q#1

In United States financing is divided in to this percentage; 57% financing comes from personal contribution; 3.5% comes from friends and family; 12.7% comes from bank loans, lines of credit, working capital loans and SBA guaranteed loans; 11.71% comes from asset backed debt; and 14.4% entrepreneur use no money at all to finance their business.

Q#2

Banking evolution in United States

The evolution of banking in America starts from 1791. The initial stage of banking is from 1791-1863. The first bank was established in 1791 and was empowered till 1811. And after that in 1816 the second bank was established and that bank was empowered till 1836. In early ages of banking system there was no specific rules, and there was also no specific currency of the nation, every bank had its own currency and there was a great competition between banks. For that they didn't accept others' currency. And these banks issued such currency which was acceptable by all banks.

In 1863 there was a congress passed whose name was "The National Bank Act". This act was empowered from 1863-1913. The act defines some new rules of banking at that time. They introduce the proper loan providing system, which was suitable at that time. And it also stopped different currencies in a nation and issued a single currency which was acceptable by everyone. There was also a tax system introduced, a 10% tax is charged on every state bank note.

Federal Reserve System (1913)

Federal Reserve System is the name of the central bank of United States. It was established in December 23, 1913 in the act of Federal Reserve Act. There are 12 Federal Reserve Banks which are supervised by the board of Federal Reserve. The planning of making the Federal Reserve System was started in 1907. With the passage of time it was established in 1913. Over time, the rules and responsibilities of the Federal Reserve System have extended and the improvements have occurred in the structure of the Federal Reserve System. Before 1913 the major problem was depression due to not proper allocation of money supply and control of the currency value, there are also great problems regarding money, so this act leads to change the situation and removes all the problems and depressions regarding money. And after that there was a proper system take place.

Q#3

Activities performed by the banks of United States

United States banks are the world's largest and most innovative banks. Their research work is very good and effective. They first observe other banks of the world, they watch their activities which they perform and then if it is effective then they adopt such strategies. And for that research they also plan what to do in the future and how to change their performance.

As the United States economy is the largest economy of the world, there is no wonder that the banks of the United States gained substantial importance in the global financial market. The banks ok United States offer vast range of services and products globally. And ranging from a single person to small business, large corporations and institutional banking, With the most advance technology (online services) available. You can access all the banks of United States from all over the world. If your account is in any bank of the United States and you are in any other country, it is quite easy to handle your account from there. You can easily take transaction from your account.

The activities which United States banks perform are:

Individual Banking Services of Banks in USA

Banking solutions for U.S. banks to those in the consumer bank, day after day to meet. Check products and ease of use and free ATM /debit card services as online banking and online payment comes with a set of additional features, such as deposits with the monthly statement is less open, and many others.

American banks' loan products are accessible in the forms of home equity loans, car loans, and personal loans. Certificates of deposit and passbook savings are the two most favored forms of savings products.

Mortgage Services of US Banks

U.S. banks offer various real estate services. Planning of services to treat a variety of customer needs mortgage. In addition to providing a standard real estate financing and U.S. banks are also mortgage calculators available to assist you in calculating the payment schedule, monthly payments and the maximum loan and charges, and more.

Mortgage-line services in the United States to assist customers in choosing the best deal. They also have the property buying process is very simple and hassle free.

Business Banking Services of Banks in the USA

U.S. banks' most recent commercial banking services to corporate clients waiting. Auditing company to take care of financial needs of all types of businesses. Banking products through syndicated loans and commercial loans and construction loans. Commercial lending business process, and equipment, and commercial buildings available for purchase.

Other Products and Services of Banks in USA

Among the banking services and products, and agricultural products, and bank loans, current accounts of the United States is the previous value. Credits for the purchase of agricultural machinery and livestock, and real estate. Checking accounts, low price and easy to use.

Internet Banking Solutions of Banks in the USA

The internet banking solutions of the banks in the USA approach with a number of services like checking balance, funds transfer, and bill payment at any point of time.

Categories of banks

There are two main categories of banks in United States and these are federally chartered national banks and state-chartered banks.

Types of banks

Thrift banks, Commercial Bank, Industrial Bank, Savings Bank, International Bank

The Largest Banks in the US

The largest banks in the US rank by deposits, according to FDIC, are:

Bank of America, JP Morgan Chase Bank, Wachovia Bank, Citibank, Washington Mutual Bank, SunTrust Bank, US Bank, Regions Bank, Branch Banking and Trust Company, National City Bank, HSBC Bank USA, World Savings Banks, Countrywide Bank, PNC Bank, Keybank, ING Bank, Merrill Lynch Bank USA, Sovereign Bank, Comerica Bank, Union Bank of California

Q#4

A bar chart shows 4,893 banks or savings institutions have more than $100 million in assets; 3,517 have $100 to $500 million; 859 have $500 million to $5 billion; 150 have $5 to $50 billion; and 22 have more than $50 billion. 

4883+3517+859+150+50=9459 banks with $100 million or more.

The FDIC bank data shows that there are 8,430 commercial banks as of August 22, 2008.

Top ten banks

Bank of America, its total deposits are 817,989,321, no. of offices is 6,173 and its main head office is in North Carolina.

JPMorgan Chase Bank, its total deposits are 618,124,000, no. of offices is 5,229 and its main head office is in Ohio.

Wachovia Bank, its total deposits are 394,189,004, no. of offices is 3,338 and its main head office is in North Carolina.

 Wells Fargo Bank, its total deposits are 325,417,000, no. of offices is 3,429 and its main head office is in South Dakota.

Citibank, its total deposits are 265,947,879, no. of offices is 1,046 and its main head office is in Nevada.

U.S. Bank, its total deposits are 151,902,585, no. of offices is 2,902 and its main head office is in Ohio.

SunTrust Bank, its total deposits are 118,532,355, no. of offices is 1,747 and its main head office is in Georgia.

National City Bank, its total deposits are 101,141,375, no. of offices is 1,551 and its main head office is in Ohio.

Branch Banking and Trust Company, its total deposits are 93,753,403, no. of offices is 1,505 and its main head office is in North Carolina.

Regions Bank, its total deposits are 93,701,749, no. of offices is 1,882 and its main head office is in Alabama.

Q#5

Activities of the Bank

As many of you know, the World Bank, a multilateral institution, the reserves of the central bank is not in arbitration, but also central banks and other financial and monetary stability of financial agents to promote an interest in an umbrella organization of performance.In this context, the activities of banks during the last fiscal year, then scored diversity.

Banking operations

Central banks, their customers'money in cash always first bankguidelines, security, privacy, and are making a comeback. To achieve these objectives, the Bank's strategy to provide customers apply the options to return the liquid components of the investment portfolio of the central bank are comparable in quality to the collection, and careful monitoring and management of credit risk and market provide the Central Bank.

Under this strategy, the bank approximately just under 90 billion dollars over the past 10 years on its balance sheet was an increase in the period 1990-1991 is over $ 20 billion for fiscal 2001 / 02 At the end of $ 175 billion, an increase in the coming year. 

Medium-term instruments in recent years are a major attraction for the money the central bank. Growth in late 1998 with the purchase agreement dated at the time of construction MTIs the end of 2001, the device for a record 48 billion U.S. dollars to meet customer demand. However, higher expectations on interest rates in early2002, many central banks, the duration of its portfolio, as well as the Bank for International Settlements is small. As a result, a small book feels Hungary.

In addition, because of central bank reserves, a number of other financial services to their customers bank offers. The central banks of short-term loans, usually secured, as well as services including foreign exchange and gold. Services in recent years have enabled the management of assets of the bank, which formed an important market area is possible. Many central bank governor and currently manages the loss of international rules of the Bank.

The World Bank, the central bank reserves to maintain its position in the arbitration, to the changing needs of our customers will need to be answered. The flexibility of performance and security with a combination of providing attractive investment instruments include a continued focus. It also calls for the exchange of technical know-how. Last but not least, commitment to excellence in credit risk and liquidity risk, market risk and operational risk by careful monitoring to support. 

Analytical and statistical contributions of the Bank

A bank resource of primary energy is another area, and direct service delivery records and statistics. Advantage of the bank's activities in this area deserves special mention. One increasingly supported by the Bank's participation in meetings of the global nature. Others, which I will discuss in a detailed analysis in support of international cooperation is the driving force.

Whereas 15 years ago the meetings under the auspices of the BIS brought together the central banks of the most important industrial countries, today's meetings are almost uniformly marked by the geographical diversity of participants. In addition, the number of meetings taking place in all regions of the world has expanded greatly.

He saw regular bimonthly meetings of the members of central banks in the course of representation can be extended. Bank for International Settlements is also a feature of the meetings of governing others. For example, the now mature economies, theCentral Bank of annual monetary policy with representatives of working groups organized by them. And now, Africa, Asia and Central and Eastern Europe and Latin America senior central bank officials held separate meetings. For global cooperation to prove a fertile area is the issue of governance of the central bank. Countries with a diverse group of eight central bankers to control the Central Bank direct banking network now extends to 40 in the central part of the world. I once again that not only the Bank for International Settlements, the shareholders of these efforts, but other central banks such as stress involved, either through direct participation or would, if possible, to discuss a number of publications through the contents of the Communication is not.

Because of their services following more comprehensive and analytical and statistical activities of the bank, focusing on financial stability issues another characteristic of sharpness. The weakness we've seen in recent years in the financial markets was reflected on the nature. The responsibility for all parts of the world financial officials to establish the identity of the president will be to maintain financial stability. It mainly covers the central banks. But also to other interested parties - supervisors and fiscal authorities and the private sector - which commits the World Bank is closely involved in the debate on financial stability required.

In this context, the Bank for International Settlements and the issues of financial stability of a large-scale meetings financed by the Bank deals with research conducted on selected topics. Potential weaknesses in the financial markets, including regular monitoring. Financial markets and growth performance, and fair value accounting for financial analysis of institutions, the range campus wide range of topics such as risk management, and over time to measure changes in risk are also included. Financial stability, monetary stability issues in mind can mean not ignore.The second concern of the central bank to implement monetary policy operational procedures and ways of addressing the themes, and instruments for managing exchange rates and central bank policies have an impact on capital flows.

Finally, an important and growing aspect of the Bank's activities in the analytical area has been the dissemination of the outcome of the Bank's cooperative efforts and research, and of the initiatives undertaken by the various committees hosted by the BIS.

Institute for financial stability was, which was created three years ago to strengthen control measures on best practices globally and in all countries to disseminate the latest information on issues of banking regulation and world observers in all regions of the heart of efforts to promote understanding between the full supports of the implementation. Focus on the design and implementation of regional seminars and workshops, and nearly 150 countries through more than 1,400 observers were last year on a wide range of topics in-depth knowledge of supervisory principles is able to achieve. During the current year, FSI increase the number of events that the Association of Insurance Supervisors with the International Association of Insurance Supervisors supports training courses for the number.

Activities of the committees

There are a number of committees and the secretariat at the Bank for International Settlements. Beyond the provision of banking operations and analytical services, and supporting the activities of these committees of central banks and supervisory authorities of the World Bank and other financial support for the work of the third column.

The initial set of committees that I would mention in this context the reports to the G10 governors. These include the Basel Committee on Banking Supervision, chaired McDonough President Federal Reserve Bank of New York, and Commission of the global financial system, chaired by the Deputy Governor Yamaguchi Bank of Japan, and the Committee on Payment and Settlement Systems, chaired by Lord Padova Schioppa, member of the Executive Council of the European Central Bank. Each committee focuseson building a critical mass of financial system works well - security settings and effective functioning of markets and power systems and draws its members from the national capitals. Proceed with the revision of the Basle Capital Accord of the Basel Committee grant activity last year and will no doubt continue to do so in the coming months. Let me focus on three major factors in the development of this new regime.

This must be addressed first, with the right incentives for banks to measure their risks, a comprehensive multilateral framework, minimum capital management based on three mutually reinforcing pillars, and the discipline of market monitoring and surveillance isnecessary . It is undeniable that more sophisticated methods provided by the Commission is likely to be complex. However, this simple solution based on the prudential supervision of the industry for advanced, complex and innovative can be a bit naive. Also, you do not have banks in emerging markets will be forced to adopt more sophisticated methods. Commission to ensure the quality of the final frame, in the months to come and do an exhaustive study of the impact of the new agreement.

Secondly, the agreement new capital and its relevance for the development and acceptance, and the Committee were keen to ensure that Member States not to consult with a wide range of private sector. The range on a variety of other surveillance systems in addition to efforts by the Commission.

Thirdly, the Committee for the implementation of a new agreement an important step to focus on the planning began. To guide and support the efforts of supervisors at this stage, the implementation team was formed to deal with. Channels of communication and information exchange to ensure that even non-members can contribute to the important issue of implementation.

Promote financial stability, as has been at the forefront of the activities of the global financial system. A lot of work, the last year in terms of narrowing the interaction between the real economy and financial markets and a series of unusual events that happened under review focuses on the analysis of the market response. In performing these functions, the Committee and other major emerging market economies, the central bank is based on expert knowledge of senior executives.

Q#6

Role of the Central Bank

Functions of Central Bank:

The important functions of Central Banks are as follows:-

1-Sole right of note issue

The Central Bank in every country, now, has the monopoly note issue. The issue of notes is governed by certain regulation which is enforced by the state.

2-Banker to the state

A Central Bank acts as a banker to the government. It holds cash balances of the government free of interest.

3- Banker's bank.

The central bank acts as a banker to the commercial banks.

4-Banker's clearing house

The Central Bank acts as a clearing house for the settlement of mutual obligations of different commercial banks. If a difference exists, it is paid by a cheque drawn on the banks accounts carried at the Central Bank.

5-Lendor to the last resort

The Central Bank helps the member banks in times of crisis.

6-Financial agent

The Central Banks act as financial agents for the government. It is an agent for the government in purchasing and selling of gold and foreign exchange.

7-Effective monetary policy

The aim of the government is to create employment in the country, resist undue inflation and achieve a favorable balance of payment.

8- External functions

The Central Bank also perform a number of external functions.

Q#7

Ownership of Banking Institutions

No there is not specific government lending institutions who owns the banking institutions in United States.

United States, known as a bank holding company Bank HoldingCompany Act of 1956 on a large scale in any company that controls the West as fixed. It is incumbent on all bank holding companies in the U.S. Federal Reserve System to record with the Board of Governors. Federal Reserve Board (Board of Governors, underresearch (12 pt ibid 225.) Organize activities of bank holding company, such as setting capital standards, and approval of mergers and acquisitions to monitor and to observe the operationsof these enterprises Authority is responsible. Applies even to thebank holding company wholly owned by Chief Controller of the Currency or the Federal Deposit Insurance Company may be subject to surveillance.

Q#9

Banking Risk and Crisis

Liquidity of the banking system in the United States 2007-2010 financial crisis caused by the inability of. The collapse of major financial institutions, national governments and the bailout of banks and stock markets worldwide have led to stability. In many areas, the housing market has suffered, evictions, foreclosures and vacancies for an extended period, causing numerous. Considered by many economists that the worst since the Great Depression of the 1930 financial crisis. Failure of large businesses, consumers and wealth estimated at billions of dollars the United States contributed to the decline, and significant financial commitments by governments, and a significant decline in economic activity. Were several reasons given by various experts with weights is proposed. All based on market and regulatory solutions have been implemented or are under consideration, while significant risks for the global economy in the period 2010-2011.

Q#10

Necessary for the implementation of risk management procedures that should be in place are adequate? In short, all the different types of risk reduction and management are the way, and how they apply to every area of risk controls are? To these questions, we now proceed. Big companies, a view that large-scale risk management systems used by the study appears after a review of procedures. Banking company management to implement risk management systems is based on a series of steps. Standards and Reports, position limits or rules, investment guidelines or strategies, incentive contracts and compensation.

In general, these tools of risk measurement, and establish procedures to manage these risks to acceptable levels in the range of individual items, and to encourage decision makers in a manner consistent with corporate goals and objectives to manage risk. Discover how to achieve these goals the basic techniques of risk management in each of these four parts, we asked each part of the process. In Part IV, we apply these techniques to identify risks to the banking community to manage to illustrate each.

Standards and Reports

Risk management techniques before these two conceptually different activities, namely, including setting standards and financial reporting. They are presented together because they are a sign of danger in any system are qua non. Underwriting standards, risk assessment, and auditing standards and risk management and control of all traditional instruments. Conformity assessment and classification of risk for different types of risks in the portfolio is necessary to understand, and to what extent should absorb these risks or less.

Integration of financial reports is the next item. It is clear that the external audit and regulatory reporting, evaluation and rating agency is necessary for active traders of quality and level of business risk measure. These longstanding relationships have been united for better or worse. However, the need for public accountability and asset quality and risk management information on the status required to obtain audited financial statements goes beyond. And these internal reports and a daily or weekly reports and repeated reports over the same period of consolidation, need to generally accept accounting principles instead of quarterly.

Position Limits and Rules

Internal control to manage the state second method is to use the latest range and / or minimum standards for participation. In the latter context, the risk that these assets or to arrange interviews with quality standards pre-defined is limited. Thus, even those who are qualified investments, and find the range of interview performance, and credit guarantee, the risk of different types and concentrations to normal. Although expensive to establish such limits, management, and risk that can be played by one person, and the organization as a set of restrictions on the type. In general, each person in your capital reduction and a clear promise possible. Merchants and banks, and applies to portfolio managers. Summary of limitations on a periodic basis, by business unit and reports showing the current risk. With thousands of sites for large organizations to maintain, and within a specific time and difficult, but necessary and much of this report.

Investment Guidelines and Strategies

Guidelines and recommendations for investment in the near future state of the technology used in the third set. Here in terms of concentration and commitment of certain areas of market strategy, and measurement of assets and liabilities not match, or expected performance, and a particular type of defense against systemic risk needs....

You go up to describe the limits of liability and / or avoid the risk of diversification, because managers generally operate within the boundaries of the state of the existing rules. In addition, the level of appropriate guidelines for active management of market conditions and overall portfolio of senior management will have to absorb the risks, provide advice and company level. These guidelines and matching assets and liabilities at the company level has led rescue.Moreover, securitization, derivatives activity to an increasingly Management Center to reduce exposure to be consistent with the guidelines of the Department is open to research participants.

Incentive Schemes

Measure that can sign contracts, senior management incentive compensation and individuals, monitoring the needs and developing risk mitigation is compatible with expensive related. However, these contracts with a catalyst and a system of internal control require an accurate assessment of the situation. The deployment of these tools, risk analysis and cost allocation understands the situation and determine the revenues needed for different parts of the organization are not negligible. Despite the difficulty, and system managers with other stakeholders in a more desirable objectives are designed to be a good alignment. In fact, deposit insurance and tell merchants to clearly show that the incentives, lack of compatibility can be attributed more to the financial downfall.

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