T he pre-commitment approach to bank capital regulation is a radical departure from existing bank regulatory methods. First proposed in Kupiec and O’Brien (1995c), the approach advocates letting banks choose their capital levels and fining them if losses exceed this level. The essence of the proposal is to use fines (or other penalties) to encourage risky banks to hold more capital than safer o...

Beginning students of banking must grapple with a curious paradox: the banking system can multiply deposits on a given base of reserves yet none of its member banks can do so. Let the reserve-to-deposit ratio be, say, 20 percent and the system can, by making loans, create $5 of deposit money per dollar of reserves received. By contrast, the individual bank receiving that same dollar on deposit ...

With the modern world going on-line for all businesses, we need to transact with various business organizations all over the world using different modes of payment obtained through various Financial Institutions. We have considered the following bank transaction. A person X having an account in bank C issued a cheque for certain amount in favor of a person Y having an account in bank B. But, Y ...

ROPONENTS of legislation to induce or require more banks to be members of the Federal Reserve System often argue that the existence of nonmember commercial banks creates problems for the conduct of monetary policy. Two of the most frequently mentioned of these problems are: First, the ratio of net demand deposits to bank reserves may become more variable as nonmember banks have a larger share o...

Casa is one that acts as a virtual bank vault for deposits in current and savings accounts. It beneficial only financial organizations authorized to do business under the Banking Regulation Act of 1939 can supply such banking deposits. These are referred low-cost liabilities. Compared other like recurring fixed deposits, these forms offer an interest rate around 4% depositors banks, which low c...

This paper assesses the impact of exchange information on foreign-owned bank deposits in international financial centres (IFCs). IFC declined globally by 24% or USD 410 billion during 2008 to 2019. The commencement automatic is associated average with a 22% reduction held non-IFC jurisdictions. Increasing multilateral expansion request seems diminish marginal gains new bilateral treaties. juris...