Chapter 8

Commercial Banking Structure, Regulation, and Performance

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The banking regulatory structure The structure of the commercial banking s

ystem

我国的商业银行

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Commercial banks make several decisionsthe interest rates they will pay to “hire” fundsthe types of deposits they will offerthe interest rates they will charge to lend their

fundsthe types of loans they will makethe types of securities they will acquire

Each of these decisions affects the supply and demand for funds

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The Banking Regulatory Structure

Regulation involves the formulation and issuance of specific rules to govern the structure and conduct of banks

The primary reason the banking system is regulated is to preserve its safety and soundness and ensure the fair and efficient delivery of banking services

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The Banking Regulatory Structure

The regulatory structure in place at the beginning of the 1970s was created during the 1930sput in place as a result of bank failures during

the Great Depressionthe failure of these banks was alleged to be

due to “excessive and destructive” competition among

banks leading to excessively high interest rates the granting of overly risky loans (particularly to

stock market speculators)

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The Banking Regulatory Structure The Glass-Steagall Act of 1933

established maximum ceiling on interest rates paid by banks on deposits (known as Regulation Q) interest payments on demand deposits were prohibited

established the Federal Deposit Insurance Corporation (FDIC)（存款保险公司）

1933年格拉斯 -斯蒂格尔法案：是关于银行业的立法，针对大萧条，提出 Q条例，制定了利率上限；并将商业银行和投资银行分离，创建了联邦存款保险公司。

Q条例：大萧条时期制定的关于商业银行存款利率上限的条例， 1980年废止。

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The Banking Regulatory Structure

The Glass-Steagall Act of 1933separated commercial banking from

investment bankingbanks could not own or underwrite corporate

securities the assets a bank could hold were limited to cash,

government securities, and loans

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The Banking Regulatory Structure

The Fed is the most important regulator of commercial banks (that are members of the Fed)

From the 1930s to the 1980s, the Fed shared regulatory responsibilities with two federal bodiesthe Comptroller of the Currency（货币管理署，核准国民银行的联邦机构）

the FDIC

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The Banking Regulatory Structure

Prior to the 1980s, the scope of regulation included restrictions onentrybranchingtypes of assets and liabilities permittedfinancial services that could be offeredinterest that could be paid on depositsinterest that could be charged on loans

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The Banking Regulatory Structure

Today, banks have found ways around many of these regulations

Many of the regulations have also been relaxed or eliminated

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Dual Banking (Chartering) System

Commercial banks in the U.S. are chartered（核准：银行必须得到联邦政府或州政府的许可才可以经营商业银行业务）they are given permission to engage in the

business of banking by either the federal or a state government if the bank’s charter is granted by the federal

government, it is a national bank（国民银行：获得联邦政府许可）

the Office of the Comptroller is the federal government agency that charters national banks

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National Banks

Banks that are federally chartered must be members of the Fed and must subscribe to federal deposit insurance with the FDICThe standard insurance amount currently is $250,000

per depositor. The $250,000 limit is permanent for certain retirement accounts (includes IRAs) and is temporary for all other deposit accounts through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all deposit accounts except certain retirement accounts, which will remain at $250,000 per depositor.

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State-Chartered Bank

A state-chartered bank will be regulated by its state banking authority

If it choose to join the Fed, it must also subscribe to federal deposit insurancecan also subscribe to federal deposit insurance

without joining the Fed

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Dual Banking (Chartering) System

Primary regulatory responsibility is assigned to one authority who then shares the information with the others

Some banks will be subject to regulation and supervision by as many as 3 regulatory authorities

双银行核准体系：该体系中的银行经营由联邦或州政府两者中的一个许可即可。

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Dual Banking (Chartering) System

Federal Financial Institutions Examinations Council (FFIEC)

联邦金融机构检查委员会：是一个联邦机构，为联储、联邦存款保险公司、货币管理署进行联邦金融机构检查制定统一的原则、标准、报告形式，并就提高金融机构监管的一致性问题给出政策建议。

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Bank Failures since the Inception of the FDIC, 1934-2003

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Recap

The purpose of banking regulation is to insure the safety and sounding of the banking system and the fair and efficient delivery of banking services.

The Fed is the most important regulator of the banking system. In addition, the Comptroller of the Currency and the Federal Deposit Insurance (FDIC) share regulatory responsibility with state banking departments. The FDIC insures deposits of banks and savings associations.

The Glass-Steagall Act of 1933, enacted in response to the Great Depression, established Regulation Q interest rate ceilings, separated commercial and investment banking, and created the FDIC.

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Commercial banks must be chartered. The United States has a dual banking system whereby banks may have either a national or state charter. National banks are chartered by the Comptroller of the Currency, must belong to the Fed and must have FDIC insurance.

State banks are chartered by the state in which they do business, and may or may not belong to the Fed. If they belong to the Fed they must also have FDIC insurance, otherwise not.

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The Structure of the Banking Industry

Suppose that the industry was served by a large number of small banksthis would encourage competition and efficiency

the public would be provided with the largest quantity of financial services at the lowest prices

the pressure of competition would increase the risk of failure of each bank

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The Structure of the Banking Industry

Suppose that the industry was served by a small number of large banksthis would limit competition and efficiency

the public would be provided with fewer options

fewer banks would fail

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The Structure of the Banking Industry

Because of these issues, regulators were interested in monitoring and influencing the structure of the banking market

Regulators used their powers to control entry into the market, mergers among existing firms, and branchingto maintain competition

Regulators also tried to protect banks from excessive competition

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The Structure of the Banking Industry

The McFadden Actpassed by Congress in 1927prohibited federally chartered national banks

from branching across state linesrequired national banks to abide by state

branching laws

麦克法登法案： 1927年国会颁布的法案，不允许设立跨州的分支机构，并要求国民银行在所属州内遵守各州关于州内分支机构的法律。

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The Structure of the Banking Industry

The Interstate Banking and Branching Efficiency Act (IBBEA)passed in 1994allowed unimpeded nationwide branching

beginning mid-1997

州际银行分支机构效率法案： 1994 年 9月，国会颁布的法案，允许在全国范围内不受限制地设立分支机构。

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Size-Distribution of FDIC-Insured Banks as of September 23, 2003

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Recap

Regulations on chartering have affected the structure of banking. The McFadden Act of 1927 outlawed interstate branching and made national banks abide by the intrastate branching laws of the state in which they were located.

The Interstate Banking and Branching Efficiency Act (IBBEA) of 1994 repealed the McFadden. Prior to its passage, large banks had found ways around the McFadden Act.

A small number of large banks control a very large percentage of banking assets. A large number of small banks control a very small portion of banking assets. Banking is becoming even more heavily concentrated.

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我国的商业银行 政策性银行：国家开发银行、中国进出口银行、中国农业发展银行

中国工商银行、中国农业银行、中国银行中国、建设银行

全国性股份制银行：交通银行、中信银行、中国光大银行、华夏银行、广东发展银行、深圳发展银行、招商银行、上海浦东发展银行、兴业银行、民生银行、恒丰银行、浙商银行、渤海银行

地方性银行