商业银行管理系统ROSE7e课后问题详解chapter04.docx
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商业银行管理系统ROSE7e课后问题详解chapter04
CHAPTER4
CREATINGANDMANAGINGSERVICEOUTLETS:
NEWCHARTERS,BRANCHES,ANDELECTRONICFACILITIES
GoalofThisChapter:
ThepurposeofthischapteristolearnhownewbanksarecharteredbystateandfederalauthoritiesintheUnitedStates,todeterminewhatmakesagoodsiteforanewbranchoffice,torecognizehowtheroleofbranchofficesischanging,andtoexploretheadvantagesanddisadvantagesofautomatedbankingfacilities.
KeyTopicsinThisChapter
∙CharteringNewFinancialServiceInstitutions
∙PerformanceofNewBanks
∙EstablishingFullServiceBranches
∙In-StoreBranching
∙EstablishingLimitedServiceFacilities
∙ATMsandTelephoneCenters
∙TheInternetandOnlineBanking
ChapterOutline
I.Introduction
A.TheImportanceofConvenienceandTimelyAccesstoCustomers
B.ServiceOptionsAvailableToday
1.CharteringNew(DeNovo)FinancialInstitutions
2.EstablishingNewFull-ServiceBranches
3.SettingUpLimited-ServiceFacilities
II.CharteringaNewBankorOtherFinancialServiceInstitutions
III.TheBankCharteringProcessintheUnitedStates
A.TheCharteringAuthoritiesintheU.S.
B.BenefitsofApplyingforaNationalCharter
C.BenefitsofApplyingforaStateCharter
IV.QuestionsRegulatorsUsuallyAsktheOrganizersofaNewBank
V.FactorsWeighingontheDecisiontoSeekaNewBankCharter
A.ExternalFactors
1.LevelofEconomicActivity
2.GrowthofLocalEconomicActivity
3.TheNeedforaNewBank
4.StrengthandCharacterofLocalCompetitioninSupplyingFinancialServices
B.InternalFactors
1.QualificationsandContactsoftheOrganizers
2.ManagementQuality
3.PledgingofCapitalandFundstoCovertheCostofFilingaCharterApplicationandGettingUnderway
VI.VolumeandCharacteristicsofNewBankCharters
A.NumbersofNewCharters
B.CharacteristicsofNewCharterMarkets
VII.HowWellDoNewBanksPerform?
A.NewBankFinancialPerformance
B.Pro-CompetitiveEffectsonServiceOfferingsandServicePricing
VIII.EstablishingFull-ServiceBranchOffices:
ChoosingLocationsandDesigningNewBranches
A.AdvantagesofFull-ServiceBranches
B.TrendsintheDesignofNewBranches
C.DesirableSitesforNewBranches
D.ExpectedRateofReturn
E.GeographicDiversification
F.BranchRegulation
G.TheChangingRoleofBranches
H.In-StoreBranching
IX.EstablishingandMonitoringAutomatedLimited-ServiceFacilities
X.Point-of-SaleTerminals
XI.AutomatedTellers(ATMs)
A.HistoryofATMs
B.ATMServices
C.FeeStructuresforATMUsage
D.CustomerServiceLimitationsofATMs
E.ExampleoftheATMCapital-BudgetingDecision
XII.HomeandOfficeOnlineBanking
A.TelephoneBankingandCallCenters
B.InternetBanking
1.ServicesProvidedThroughtheInternet
2.ChallengesinProvidingInternetServices
3.TheNetandCustomerPrivacyandSecurity
XIII.FinancialServiceFacilitiesoftheFuture
XIV.SummaryoftheChapter
ConceptChecks
4-1.Whyisthephysicalpresenceofabankstillimportanttomanybankcustomersdespiterecentadvancesinlong-distancecommunicationstechnology?
Manycustomersstillpreferthepersonalattentionandpersonalservicethatcontactwithbankemployeesprovides.Moreover,forthoseserviceswhereproblemscanarisethatrequiredetailedinformationandexplanation-forexample,whenacheckingaccountisoverdrawnandchecksbegintobounce-thecustomerneedsquickaccessand,often,thepersonalattentiontohisorherproblemonthepartofoneormoreemployees.
4-2.Whyisthecreation(chartering)ofnewbankscloselyregulated?
Whataboutnonblankfinancialfirms?
Thecreationofnewbanksisregulatedtoinsurethesafetyandsoundnessofexistingbanksandtoavoidexcessivenumbersofbankfailures.Thesameargumentsareusuallymadefornon-bankfinancialfirms.Financial-Servicefirmsholdthepublic’ssavings,aretheheartofthepaymentsystemandcreatemoney.Thefailureofthesefirmscoulddisrupttheeconomyandtoomanycouldmeaninexcessivegrowthinthemoneysupplyandinflation.
4-3.Whatdoyouseeastheprincipalbenefitsandcostsofgovernmentregulationofthenumberoffinancialservicechartersissued?
Whilecontrolovertheentryofnewbanksmayreducethenumberoffailures,italsolimitscompetition,sothatthepublicmayreceiveasmallervolumeorlowerqualityofservicesatexcessiveprices.
4-4.WhochartersnewbanksintheUnitedStates?
Newthriftinstitutions?
Newbanksarecharteredbythebankingcommissionsoftheindividualstatesor,atthefederallevel,bytheComptrolleroftheCurrency.ThriftinstitutionsarecharteredbythestatesoratthefederallevelbytheOfficeofThriftSupervision.
4-5.WhatkeyroledoestheFDICplayinthecharteringprocess?
TheFDICexercisessomecontroloverstatebankcharteractivityaswellasfederalchartersbecausemoststatesinsistthattheirnewbanksqualifyforfederaldepositinsurancebeforetheycanopenforbusiness.
4-6.Whataretheadvantagesofhavinganationalbankcharter?
Astatebankcharter?
Thebenefitsofanationalcharterare:
a.)Itbringsprestigeduetostricterregulationsandmayhelpattractmorecustomers
b.)Intimesoftroublethetechnicalassistancegivenmaybebetterensuringabetterchanceoflongrunsurvival
Thebenefitsofastatecharterare:
a.)Itmaybeeasierandlesscostlytogetastatecharter
b.)ThebankdoesnothavetojointheFederalReserveandthereforeavoidsbuyingandholdinglowyieldstockoftheFederalReserve
c.)Manystatesletabanklendmoretooneborrower
d.)Statecharteredbanksmaybeabletomaketypesofloansthatanationallycharteredbankcannot
4-7.WhatkindsofinformationmusttheorganizersofnewnationalbanksprovidetheComptrolleroftheCurrencyinordertogetacharter?
Whymightthisrequiredinformationbeimportant?
TheComptrolleroftheCurrencyasksforinformationonthenumberofcompetingbanksandbank-likeinstitutionsintheserviceareaoftheproposedbank.Morecompetitivemarketsituationslimittheprofitpotentialandperhapsthegrowthpotentialofanewbank.Alsorequestedisinformationaboutshoppingcenters,retailandwholesalebusinessactivity,recentpopulationgrowth,trafficcounts,andpersonalincomelevels-allviewedasindicatorsofpotentialdemandforbankingservicesintheserviceareaoftheproposednewbank.ApplicantsmustalsoprovidebackgroundinformationontheorganizersandproposedmanagementofanewbanksotheComptrollercandecideifthesepeoplearequalified,law-abiding,andtrustworthytomanagethepublic'sfundsaswellastheirown.
4-8.Whydoyouthinktheorganizersofanewfinancialfirmareusuallyexpectedtoputtogetherandsubmittothecharteringauthorityadetailedbusinessplan,includingmarketing,management,andfinancialcomponents?
Thisdemonstratestoregulatorsthattheorganizersofthebankhavetheexpertise,experienceandskillsnecessarytobesuccessfulinmanagingthenewbank.Iftheorganizersofabankdonotknowwheretheyaregoing,theyareunlikelytobesuccessful.Inaddition,itdemonstrateswhethertheorganizersofthenewbankhavearealisticpictureofthecommunitytheyareplanningonservingandwhethertheorganizershavearealisticviewoftheprofitpotentialinthenewbank.
4-9.Whatarethekeyfactorstheorganizersofanewfinancialfirmshouldconsiderbeforedecidingtoseekacharter?
Whileavarietyoffactorsareexaminedbydifferentbusinesspeopleinterestedinestablishinganewbank,mostlookatsomeorallofthefollowingfactors.
1.ExternalFactors
a.Theleveloflocaleconomicactivity.
b.Growthoflocaleconomicactivity.
c.Theneedforanewbank.
d.Thestrengthandcharacteroflocalcompetitioninsupplyingfinancialservices.
2.InternalFactors
a.Qualificationsandcontactsofthenewbank'sorganizers.
b.Managementquality.
c.Pledgingofcapitalandfundstocoverthecostoffilingacharterapplicationandbeginoperations.
4-10.WherearemostnewbankscharteredintheUnitedStates?
Newcharterstendtobeconcentratedinlargeurbanareaswhereexpectedratesofreturnontheorganizersinvestmentsarelikelytobethehighest.Asthepopulationincreasesrelativetothenumberoffinancialfirms,thenumberofnewchartersincreases.Thesuccessoflocalbanksalreadyintheareasuggeststhatnewfinancialfirmswouldalsobesuccessful.Placeswheretheconcentrationratiofornewbankshasincreasedtendtohavefewernewbankcharters.
4-11.Howwelldomostnewbanksperformforthepublicandfortheirowners?
Mostnewbankssucceed,especiallythosewhoseorganizerscanbringinnewdepositsandloanaccountsduringthefirstyearofthebank'soperation.Mostareprofitablewithintwotothreeyearsofopening.Thereissomeevidencethatnewlychartedbanksarefinancially‘fragile’andmorepronetofailurethanexistingbanks.Theyappeartobemorevulnerabletorealestatecrisesthanestablishedbanks.Newbankstendtounderperformtheircompetitorsuntiltheyhavebeenaroundforawhileandnewbanksaremorecloselysupervisedthanestablishedbanks.
4-12.Whyistheestablishmentofnewbranchofficesusuallyfavoredoverthecharteringofnewfinancialfirmsasavehiclefordeliveringfinancialservices?
Thecharteringofanewfinancingcorporationisnormallyalengthyandexpensiveprocess,requiringthecompletionofelaboratefederalorstateapplicationforms,whilethebranchapplicationprocessisnormallyfarsimplerandlesscostly.Moreover,withtheincreaseinthenumberoffailuresinrecentyearsregulatory-imposedcapitalrequirementsfornewchartershaveincreasedsubstantial