Got a tricky question? Receive an answer from students like you! Try us!

"Are banks losing their traditional role?" - Essay Example

Only on StudentShare
Author : vernoncollins

Summary

Bank’s role Traditionally banks have played a crucial role in financial systems through playing an intermediary role in financial markets. Banks are considered to be asset transformers. They have created assets with one set of characteristics and accepted deposits with the other…

Extract of sample
"Are banks losing their traditional role?"

However, over the last few years, banking has changed radically and is expected to continue changing in a foreseeable future. The purpose of this essay is to discuss the principal functions of banks, the emerging challenges and the impact of market and global dynamism on the future of banks and banking institutions. The types of institutions performing banking business have been changing. Banks seem to be foregoing their traditional role. In many countries, the income coming off-balance sheet exceeds the income coming from the traditional intermediary roles in finances. Banks have become financial services organizations. The actual role of banks is increasingly becoming ambiguous since it is no longer clear what banks are or the details of the businesses they conduct. The actual definition of a bank seems to be missing. This has caused banks to be under intensive regulations compared to many financial institutions. Banks the world over are experiencing formidable challenges. Banking institutions have been losing their past monopolies and perceived comparative advantages. These attributes have underpinned the dominant positions taken by the banks in the financial systems. Banks are increasingly facing stiff competition from potential or actual suppliers of banking services (Fredrick 2005). ...
Download paper

Related Essays

Traditional accounting pricing tools are not fit for the 21st century
This paper illustrates that since the production of the goods had started the price has been a great matter of concern for both the sellers and buyers. The producers and sellers have been coming up with different pricing techniques and strategies that they found perfect in the scenario they are working. With the change in time and modernization of the society, it has become evident for the sellers to adopt new and better pricing strategies to compete well in market and keep up with the expected prices of consumers as the consumers are always having a wider choice of companies to buy the…
18 pages (4518 words)
Banks and Stocks
It generally concentrates on building up the innovative strategies to meet the requirements of its client’s daily and future needs. But recently JP Morgan Chase & Co. had suffered a “significant” loss amounting to $ 2 billion faced in the credit investments of portfolio, as stated in the New York Times on the news of 17th May, 2012. Within a week’s disclosure of the news JP Morgan Chase & Co. was stroked with another blow, i.e., another loss of at least $1 billion. The momentum of the loss of JP Morgan went high with the hedge funds and other investors taking an upper hand of the…
3 pages (753 words)
Mega Banks vs. Community Banks
They play a crucial role in development of economy across length and breadth of the US. They remain very important in small-business sector and agricultural lending. The paper aims to explore the contrasting roles played by Community banks and large banks in the national economy and the regulatory burden that “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” is likely to put on them impacting their performance in the national economy. Small Business Lending Small businesses account for a huge share of total economic output and employment. Small business with fewer than…
4 pages (1004 words)
Are the European banks riskier than the US competitors for the period 2002-2007? yang
The crisis was caused due to the failure of many banking sector across the world. The firms which had failed in UK allowed their businesses to overextend through risk taking and excessive leverage, over dependence on risky product streams like derivatives or buy-to-let mortgages, poor decisions of management in respect of acquisitions, over reliance on wholesale funding. The project describes the position of European banks and its US competitors during the period of global financial crisis and which banks were more riskier during that time. Introduction Unprecedented innovation and growth have…
5 pages (1255 words)
IT Evolution in Global Banking
The customers can also access their bank accounts, withdraw cash, pay bills, get bank statements, deposit cash and even buy products without having to visit their bank branches. Indeed, what technology has facilitated is the reduction of physical conduct between the customer and the banker bringing in a new phenomenon known as virtual banking. Information technology can offer a bank a competitive edge over other banks (Singer, Ross & Avery 2005) The internet invention was the greatest breakthrough for banks in carrying out their transactions with customers (Wanderi 2012). As internet access is…
5 pages (1255 words)
The role of quantitative easing in distorting equity markets leading to a distortion in the labor market.
The governments in these countries have been actively taking policy measures, such as quantitative easing and easy monetary policies to boost up the economies and increase level of economic performance. Table of Contents Table of Contents 3 Central Bank Tools Discussion 5 Recent Recession and its effects 8 Equity Markets Bubble in Banking Sector 9 Compare QEs in US, EU and Japan 10 Effects on the Labour Markets 11 Conclusion 12 Works cited 13 Name of the Student Name of the Professor Course Number Date The role of quantitative easing in distorting equity markets leading to a distortion in the…
10 pages (2510 words)
Role of Banks in Real Estate Financing in Saudi Arabia
The real estate boom in the Kingdom of Saudi Arabia has attracted banks to fund the projects in this sector. Banks financing real estate create a win-win scenario for the owners as well as the banks. There are other financiers in real estate including the Saudi Arabia Government. The terms and conditions for the banks and other real estate financiers vary depending on the project and location. Banks have been playing an important role in financing real estate sector in Saudi Arabia increasing the current boom in the sector, lending banks and the real estate owners profit from this arrangement…
11 pages (2761 words)