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37 Cards in this Set
- Front
- Back
Insurance Companies
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Provide financial protection to individuals and businesses for life, property, liability, and health uncertainties.
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Pension Funds
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Receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees for use during their retirement years.
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Investment Companies
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Sell shares in their firms to individuals and others and invest the pooled proceeds in corporate and government securities.
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Mutual Fund
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Open-end investment company that can issue an unlimited number of its shares to its investors and use the polled proceeds to purchase corporate and government securities.
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Investment Banking Firms
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Sell or market new securities issued by businesses to individual and institutional investors.
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Brokerage Firms
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Assist individuals to purchase new or existing securities issues or to sell previously purchased securities.
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Finance Companies
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Provide loans directly to consumers and businesses or aid individuals in obtaining financing of durable goods and homes.
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Mortgage Banking Firms
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Originate mortgage loans on homes and other real property by bringing together borrowers and institutional investors.
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Commercial Bank
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Accept deposits, issues check-writing accounts, and makes loans to individuals and businesses.
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Investment Bank
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Helps businesses sell their new debt and equity securities to raise financial capital.
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Glass-Steagall Act of 1933
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Provided for separation of commercial banking and investment banking activities in the United States.
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Gramm-Leach-Bliley Act of 1999
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Repealed the separation of commercial banking and investment banking activities provided for in the Glass-Steagall Act.
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Universal Bank
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Bank that engages in both commercial banking and investment banking activities.
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Banking System
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Includes commercial banks, savings and loans, savings banks, and credit unions that operate in the U.S. financial system.
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Thrift Institutions
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Savings and loan associations, savings banks, and credit unions that accumulate individual savings and lend primarily to individuals seeking consumer and mortgage loans.
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Savings Bank
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Accepts the savings of individuals and lends pooled savings to individuals primarily in the form of mortgage loans.
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Savings and Loan Association
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Accepts individual savings and lends pooled savings to individuals, primarily in the form of mortgage loans, and businesses.
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Credit Union
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A cooperative nonprofit organization that exists primarily to provide member depositors with consumer credit.
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Dual Banking System
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Allows commercial banks to obtain charters either from the federal government or a state government.
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Unit Banking
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Exists when a bank can have only one full-service office.
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Limited Branch Banking
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Allows additional banking offices within a geographically defined distance of a bank's main office.
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Statewide Branch Banking
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Allows banks to operate office throughout a state.
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One Bank Holding Companies (OBHCs)
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Permits a firm to own and control only one bank.
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Multibank Holding Companies (MBHCs)
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Permits a firm to own and control two or more banks.
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Secured Loan
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Loan backed by collateral.
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Unsecured Loan
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Loan that is a general claim against the borrower's assets.
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Prime Rate
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Interest rate on short-term unsecured loans to highest-quality business customers.
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Certificates of Deposit (CD)
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Time deposits with a stated maturity.
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Federal Funds
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Overnight loans from banks with excess reserves to banks that need to borrow funds to meet minimum reserve requirements.
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Bank Liquidity
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Reflects ability to meet depositor withdrawals and to pay off other liabilities when due.
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Bank Solvency
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Reflects ability to keep the value of a bank's assets greater than it liabilities.
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Liquidity Risk
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Likelihood that a bank will be unable to meet depositor withdrawal demands and other liabilities when due.
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Primary Reserves
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Vault cash and deposits held at other depository institutions and at Federal Reserve Banks.
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Secondary Reserves
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Short-term securities held by banks that can be quickly converted into cash at little cost.
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Credit (default) Risk
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The chance of nonpayment or delayed payment of interest or principal.
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Interest Rate Risk
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Possible price fluctuations in fixed-rate debt instruments associated with changes in market interest rates.
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International Banking
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Exists when banks operate in more than one country.
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