BANKING
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Banks in the economy
Size of global banking industry
Worldwide
assets of the largest 1,000 banks grew 15.5% in 2005 to reach a record
$60.5 trillion. This follows a 19.3% increase in the previous year. EU
banks held the largest share, 50% at the end of 2005, up from 38% a
decade earlier. The growth in Europe’s share was mostly at the expense
of Japanese banks whose share more than halved during this period from
33% to 13%. The share of US banks also rose, from 10% to 14%. Most of
the remainder was from other Asian and European countries.
The
US had by far the most banks (7,540 at end-2005) and branches (75,000)
in the world. The large number of banks in the US is an indicator of
its geography and regulatory structure, resulting in a large number of
small to medium sized institutions in its banking system. Japan had 129
banks and 12,000 branches. In 2004, Germany, France, and Italy had more
than 30,000 branches each—more than double the 15,000 branches in the
UK.
Bank crisis
Banks
are susceptible to many forms of risk which have triggered occasional
systemic crises. Risks include liquidity risk (the risk that many
depositors will request withdrawals beyond available funds), credit
risk (the risk that those who owe money to the bank will not repay),
and interest rate risk (the risk that the bank will become unprofitable
if rising interest rates force it to pay relatively more on its
deposits than it receives on its loans), among others.
Banking
crises have developed many times throughout history when one or more
risks materialize for a banking sector as a whole. Prominent examples
include the U.S. Savings and Loan crisis in 1980s and early 1990s the
Japanese banking crisis during the 1990s, the bank run that occurred
during the Great Depression, and the recent liquidation by the central
Bank of Nigeria, where about 25 banks were liquidated.[citation needed]
Challenges within the banking industry
The
banking industry is a highly regulated industry with detailed and
focused regulators. All banks with FDIC-insured deposits have the FDIC
as a regulator; however, for examinations, the Federal Reserve is the
primary federal regulator for Fed-member state banks; the Office of the
Comptroller of the Currency (“OCC”) is the primary federal regulator
for national banks; and the Office of Thrift Supervision, or OTS, is
the primary federal regulator for thrifts. State non-member banks are
examined by the state agencies as well as the FDIC. National banks have
one primary regulator—the OCC.
Each regulatory agency has their own set of rules and regulations to which banks and thrifts must adhere.
The
Federal Financial Institutions Examination Council (FFIEC) was
established in 1979 as a formal interagency body empowered to prescribe
uniform principles, standards, and report forms for the federal
examination of financial institutions. Although the FFIEC has resulted
in a greater degree of regulatory consistency between the agencies, the
rules and regulations are constantly changing.
In
addition to changing regulations, changes in the industry have led to
consolidations within the Federal Reserve, FDIC, OTS and OCC. Offices
have been closed, supervisory regions have been merged, staff levels
have been reduced and budgets have been cut. The remaining regulators
face an increased burden with increased workload and more banks per
regulator. While banks struggle to keep up with the changes in the
regulatory environment, regulators struggle to manage their workload
and effectively regulate their banks. The impact of these changes is
that banks are receiving less hands-on assessment by the regulators,
less time spent with each institution, and the potential for more
problems slipping through the cracks, potentially resulting in an
overall increase in bank failures across the United States.
The
changing economic environment has a significant impact on banks and
thrifts as they struggle to effectively manage their interest rate
spread in the face of low rates on loans, rate competition for deposits
and the general market changes, industry trends and economic
fluctuations. It has been a challenge for banks to effectively set
their growth strategies with the recent economic market. A rising
interest rate environment may seem to help financial institutions, but
the effect of the changes on consumers and businesses is not
predictable and the challenge remains for banks to grow and effectively
manage the spread to generate a return to their shareholders.
The
management of the banks’ asset portfolios also remains a challenge in
today’s economic environment. Loans are a bank’s primary asset category
and when loan quality becomes suspect, the foundation of a bank is
shaken to the core. While always an issue for banks, declining asset
quality has become a big problem for financial institutions. There are
several reasons for this, one of which is the lax attitude some banks
have adopted because of the years of “good times.” The potential for
this is exacerbated by the reduction in the regulatory oversight of
banks and in some cases depth of management. Problems are more likely
to go undetected, resulting in a significant impact on the bank when
they are recognized. In addition, banks, like any business, struggle to
cut costs and have consequently eliminated certain expenses, such as
adequate employee training programs.
Banks
also face a host of other challenges such as aging ownership groups.
Across the country, many banks’ management teams and board of directors
are aging. Banks also face ongoing pressure by shareholders, both
public and private, to achieve earnings and growth projections.
Regulators place added pressure on banks to manage the various
categories of risk. Banking is also an extremely competitive industry.
Competing in the financial services industry has become tougher with
the entrance of such players as insurance agencies, credit unions,
check cashing services, credit card companies, etc.
Profitability
A
bank generates a profit from the differential between the level of
interest it pays for deposits and other sources of funds, and the level
of interest it charges in its lending activities. This difference is
referred to as the spread between the cost of funds and the loan
interest rate. Historically, profitability from lending activities has
been cyclical and dependent on the needs and strengths of loan
customers. In recent history, investors have demanded a more stable
revenue stream and banks have therefore placed more emphasis on
transaction fees, primarily loan fees but also including service
charges on an array of deposit activities and ancillary services
(international banking, foreign exchange, insurance, investments, wire
transfers, etc.). Lending activities, however, still provide the bulk
of a commercial bank's income.
In the
past 10 years American banks have taken many measures to ensure that
they remain profitable while responding to increasingly changing market
conditions. First, this includes the Gramm-Leach-Bliley Act, which
allows banks again to merge with investment and insurance houses.
Merging banking, investment, and insurance functions allows traditional
banks to respond to increasing consumer demands for "one-stop shopping"
by enabling cross-selling of products (which, the banks hope, will also
increase profitability). Second, they have expanded the use of
risk-based pricing from business lending to consumer lending, which
means charging higher interest rates to those customers that are
considered to be a higher credit risk and thus increased chance of
default on loans. This helps to offset the losses from bad loans,
lowers the price of loans to those who have better credit histories,
and offers credit products to high risk customers who would otherwise
been denied credit. Third, they have sought to increase the methods of
payment processing available to the general public and business
clients. These products include debit cards, pre-paid cards,
smart-cards, and credit cards. These products make it easier for
consumers to conveniently make transactions and smooth their
consumption over time (in some countries with under-developed financial
systems, it is still common to deal strictly in cash, including
carrying suitcases filled with cash to purchase a home). However, with
convenience there is also increased risk that consumers will mismanage
their financial resources and accumulate excessive debt. Banks make
money from card products through interest payments and fees charged to
consumers and transaction fees to companies that accept the cards.
The
banking industry's main obstacles to increasing profits are existing
regulatory burdens, new government regulation, and increasing
competition from non-traditional financial institutions.
List of banks in Switzerland
1. A & A Actienbank
2. ABB Export Bank
3. ABN AMRO Bank (Schweiz)
4. ABN AMRO Bank N.V., Amsterdam
5. AIG Private Bank Ltd.
6. ANZ Grindlays Bank plc
7. AP Anlage & Privatbank AG
8. Aargauische Kantonalbank
9. Adler & Co. AG
10. Alpha Rheintal Bank
11. Alternative Bank ABS
12. Amas Bank (Switzerland) Ltd.
13. American Express Bank (Switz.)
14. Amtsersparniskasse Oberhasli
15. Amtsersparniskasse Schwarzenbu
16. Amtsersparniskasse Thun
17. Anker Bank
18. Appenzeller Kantonalbank
19. Arab Bank (Switzerland) Ltd.
20. Armand von Ernst & Cie. AG
21. Artesia (Suisse) SA
22. Arzi Bank AG
23. Atlantic Vermögensverwaltungsbank
24. BB Bank Belp
25. BBVA Privanza Bank (Switzerland) Ltd.
26. BDL Banco di Lugano
27. BEKB ¦ BCBE
28. BFC Banque Financière de la Cité
29. BGG Banque Genevoise de Gestion
30. BHF-Bank (Schweiz) AG
31. BLP Banque de Portefeuilles
32. BNP Paribas (Suisse) SA
33. BS Bank Schaffhausen
34. BSI SA
35. BZ Bank Aktiengesellschaft
36. Baloise Bank SoBa
37. Banca Arner SA
38. Banca Commerciale Italiana (Switzerland)
39. Banca Commerciale Lugano
40. Banca Euromobiliare (Suisse) SA
41. Banca Monte Paschi (Suisse) SA
42. Banca Popolare di Sondrio (Suisse) SA
43. Banca Privata Edmond de Rothschild Lugano SA
44. Banca Unione di Credito
45. Banca del Ceresio SA
46. Banca del Gottardo
47. Banca del Sempione
48. Banca dello Stato del Cantone Ticino
49. Banca di Credito e Commercio (BANKREDIT)
50. Banco Mercantil (Schweiz) AG
51. Banco Santander Central Hispano (Suiza) SA
52. Bank Adamas AG
53. Bank Austria Creditanstalt (Schweiz) AG
54. Bank Bütschwil
55. Bank CA St. Gallen
56. Bank CIAL (Schweiz)
57. Bank Coop
58. Bank EEK
59. Bank Eschenback
60. Bank Hapoalim (Schweiz) AG
61. Bank Hofmann AG
62. Bank Hugo Kahn & Co. AG
63. Bank J. Vontobel & Co. AG
64. Bank Jacob Safra (Schweiz) AG
65. Bank Julius Bär & Co. AG
66. Bank Leerau
67. Bank Leu AG
68. Bank Leumi le-Israel (Schweiz)
69. Bank Linth
70. Bank Morgan Stanley AG
71. Bank Sal. Oppenheim Jr. & Cie.
72. Bank Sarasin & Cie. AG
73. Bank Sparhafen Zürich
74. Bank Thorbecke AG St.
75. Bank Wartau-Sevelen
76. Bank am Bellevue
77. Bank for International Settlements
78. Bank für Handel & Effekten
79. Bank im Thal
80. Bank in Gossau
81. Bank in Huttwil
82. Bank in Langnau AG
83. Bank in Zuzwil
84. Bank of America, National Association
85. Bank of New York - Inter-maritime Bank
86. Bank of Tokyo-Mitsubishi (Schweiz) AG
87. Bank von Ernst & Cie AG
88. Banque Algérienne du Commerce Extérieur SA
89. Banque Audi (Suisse) SA
90. Banque Banorient (Suisse)
91. Banque Baring Brothers Sturdza SA
92. Banque Bonhôte & Cie SA
93. Banque Bruxelles Lambert (Suisse) SA
94. Banque CAI Caisse Alfa Banques
95. Banque Cantonale Neuchâteloise
96. Banque Cantonale Vaudoise
97. Banque Cantonale de Fribourg
98. Banque Cantonale de Genève
99. Banque Cantonale du Jura Porrentruy
100. Banque Cantonale du Valais
101. Banque Degroof Luxembourg SA
102. Banque Diamantaire Anversoise (Suisse) SA
103. Banque Franck SA
104. Banque Française de l'Orient (Suisse) SA
105. Banque Galland & Cie. SA
106. Banque Général du Luxembourg (Suisse) SA
107. Banque Internationale de Commerce -- BRED
108. Banque Ippa & Associés, Luxembourg
109. Banque Jenni & Cie. SA
110. Banque Jurassienne d'Epargne et de Crédit
111. Banque Labouchere SA
112. Banque MeesPierson Gonet SA
113. Banque Multi Commerciale
114. Banque Nationale de Paris (Suisse) SA
115. Banque Pasche SA
116. Banque Piguet & Cie. SA
117. Banque Privée Edmond de Rothschild SA
118. Banque SCS Alliance SA
119. Banque Syz & Co. SA
120. Banque Tardy, de Watteville & Cie. SA
121. Banque Thaler
122. Banque Unexim (Suisse) SA
123. Banque Vontobel Genève SA
124. Banque de Camondo (Suisse) SA
125. Banque de Commerce et de Placements SA
126. Banque de Dépôts et de Gestion
127. Banque de Gestion Financière BAGEFI
128. Banque de Patrimoines Privés Genève BPG SA
129. Bantleon Bank AG
130. Barclays Bank (Suisse) SA
131. Basellandschaftliche Kantonalbank
132. Basler Kantonalbank
133. Banque Cantonale de Bâle
134. Baumann & Cie.
135. Berenberg Bank (Schweiz) AG
136. Bezirks-Sparkasse Dielsdorf
137. Bezirkskasse Laufen
138. Bezirkssparkasse Uster
139. Biene - Bank im Rheintal
140. Bordier & Cie.
141. Burgerliche Ersparniskasse Bern
142. C.I.M. Banque
143. CBG Banca Privata Lugano SA
144. CBG Compagnie Bancaire Genève
145. Caisse d'Epargne Le Crêt Le
146. Caisse d'Epargne d'Aubonne
147. Caisse d'Epargne de Nyon
148. Caisse d'Epargne de Prez, Corserey et Noréaz
149. Caisse d'Epargne de Siviriez
150. Caisse d'Epargne de Vuisternenr-devant-Romont
151. Caisse d'Epargne de la Ville de Fribourg
152. Caisse d'Epargne du District de Cossonay
153. Caisse d'Epargne du District de Courtelary
154. Caisse d'Epargne du District de Vevey
155. Caisse d'Epargne et de Crédit Mutuel de Chermignon
156. Caisse d'Epargne et de Prevoyancce d'Yverdon-les-Bains SA
157. Caisse d'Epargne et de Prévoyance de Lausanne
158. Citibank (Switzerland)
159. Citibank N.A.
160. City Bank
161. Clariden Bank
162. Clientis AG
163. Commerzbank (Schweiz) AG
164. Compagnie Bancaire Espirito Santo SA
165. Cornèr Banca SA
166. Cosba private banking AG
167. Coutts & Co. AG
168. Credit Suisse Zürich SKA
169. Credit Suisse First Boston
170. Crédit Agricole Indosuez (Suisse) SA
171. Crédit Commercial de France (Suisse) SA
172. Crédit Lyonnais (Suisse) SA
173. Crédit Mutuel de la Vallée SA
174. DC Bank, Deposito-Cassa der Stadt Bern
175. Dai-Ichi Kangyo Bank (Schweiz) AG
176. Deka (Swiss) Privatbank AG
177. Deutsche Bank (Schweiz) AG
178. Deutsche Bank (Suisse) SA
179. Dexia Privatbank (Schweiz)
180. Direkt Anlage Bank (Schweiz) AG
181. Discount Bank and Trust Company
182. Dominick Company AG
183. Dresdner Bank (Schweiz) AG
184. Dreyfus Söhne & Cie. AG
185. E. Gutzwiller & Cie. Banquiers
186. EB Entlebucher Bank
187. EFG Bank European Financial Group
188. EFG International
189. EFG Bank
190. Ehinger & Armand von Ernst AG
191. Erspariskasse Brienz
192. Ersparnisanstalt Oberuzwil
193. Ersparnisanstalt Unterwasser
194. Ersparnisanstalt der Stadt St.Gallen
195. Ersparnisgesellschaft Küttigen
196. Ersparniskasse Affoltern i.E.
197. Ersparniskasse Erlinsbach
198. Ersparniskasse Murten
199. Ersparniskasse Rüeggisberg
200. Ersparniskasse Schaffhausen
201. Ersparniskasse Speicher
202. Ersparniskasse des Amtsbezirks Interlaken
203. Eurasco Bank AG
204. F. van Lanschot Bankiers (Schweiz) AG
205. FCE Bank plc
206. FIBI Bank (Schweiz) AG
207. FTI Banque Fiduciary Trust
208. Ferrier Lullin & Cie SA
209. Finansbank (Suisse) SA
210. Finter Bank Zürich
211. Freie Gemeinschaftsbank BCL
212. GE Capital Bank
213. GRB Glarner Regionalbank Schwanden
214. Gewerbebank Männedorf
215. Glarner Kantonalbank
216. Goldman Sachs & Co. Bank
217. Gonet & Cie.
218. Graubündner Kantonalbank
219. HSBC Bank Middle East
220. HSBC Guyerzeller Bank AG
221. HSBC Private Bank (Suisse) SA
222. HYPOSWISS, Schweizerische Hypotheken- und Handelsbank
223. Habib Bank AG Zürich
224. Habibsons Bank Limited, London
225. Handelsfinanz-CCF Bank
226. Helaba (Schweiz) Landesbank Hessen-Thüringen AG
227. Hentsch Henchoz & Cie.
228. Hottinger & Cie
229. Hypothekarbank Lenzburg
230. IBI Bank AG
231. IBZ Investment Bank Zürich
232. ING Bank NV, Amsterdam
233. ING Baring Private Bank (Schweiz)
234. IRB Interregiobank
235. Instinet (Schweiz) AG
236. Investec Bank (Switzerland) AG
237. Isbank GmbH, Frankfurt am MainZweigniederlassung Zürich
238. Israel Discount Bank
239. J.P. Morgan (Suisse) SA
240. Jyske Bank (Schweiz)
241. KGS Sensebank
242. Kanz Bank
243. Kredietbank (Suisse) Lugano SA
244. Kredietbank (Suisse) SA
245. LB (Swiss) Privatbank SA
246. LGT Bank in Liechtenstein AG
247. La Roche & Co Banquiers
248. Landolt & Cie, Banquiers
249. Lavoro Bank AG
250. Leihkasse Stammheim
251. Liechtensteinische Landesbank (Schweiz) AG
252. Lienhardt & Partner Privatbank Zürich AG
253. Lloyds TSB Bank plc
254. Lombard Odier Darier Hentsch & Cie.
255. Luzerner Kantonalbank
256. Luzerner Regiobank AG
257. M.M. Warburg Bank (Schweiz) AG
258. MFC Merchant Bank SA
259. MIGROSBANK
260. Maerki, Baumann & Co. AG
261. Marcuard Cook & Cie. S.A.
262. MediBank
263. Merrill Lynch Bank (Suisse) SA
264. Merrill Lynch Capital Markets AG
265. Mirabaud & Cie.
266. Mitsubishi Tokyo Weath Management (Switzerland) Ltd.
267. Mizuho Bank (Schweiz) AG
268. Morgan Guaranty Trust Company of New York
269. Morval & Cie SA, Banque
270. Mourgue d'Algue & Cie.
271. National Bank of Kuwait (Suisse) S.A.
272. Neue Aargauer Bank Brugg AG
273. Nidwalder Kantonalbank
274. Nomura Bank (Schweiz) AG
275. Nordea Bank S.A. Luxemburg, Zweigniederlassung Zürich
276. OZ Bankers AG
277. Obersimmentalische Volksbank
278. Obwaldner Kantonalbank
279. PBS Privat Bank Schweiz AG
280. PG Partner Bank AG
281. PKB Privatbank AG
282. Pictet & Cie.
283. Privatbank Bellerive AG
284. Privatbank IHAG Zürich AG
285. Privatbank Vermag AG
286. Privatbank Von Graffenried AG
287. RBA Zentralbank
288. Rabo Robeco Bank (Schweiz) AG
289. Rahn & Bodmer
290. Redsafe Bank
291. Regiobank Solothurn
292. Reichmuth & Co.
293. Reisebank AG
294. Robert Fleming (Switzerland) AG
295. Rothschild Bank AG
296. Royal Bank of Canada (Suisse)
297. Russische Kommerzial Bank AG
298. Rüd, Blass & Cie AG
299. SB Saanen Bank
300. SEB Private Bank
301. SG Rüegg Bank AG
302. SIS AG SegaIntersettle
303. Sanwa Bank (Schweiz) AG
304. Schaffhauser Kantonalbank
305. SchmidtBank (Schweiz) AG
306. Schroder & Co. Bank AG
307. Schweizer Verband der Raiffeisenbanken
308. Schweizerische Hypotheken- und Handelsbank
309. Schweizerische Nationalbank
310. Schweizerische Schiffshypothekenbank
311. Schwyzer Kantonalbank
312. Scobag AG
313. Skandia Bank (Switzerland) SA
314. Società Bancaria Ticinese
315. Société Générale, Succursale de Zürich
316. Spar + Leihkasse Frutigen
317. Spar + Leihkasse Gürbetal
318. Spar- und Leihkasse Balgach
319. Spar- und Leihkasse Bucheggberg
320. Spar- und Leihkasse Ebnat-Kappel
321. Spar- und Leihkasse Kaltbrunn
322. Spar- und Leihkasse Kirchberg (SG)
323. Spar- und Leihkasse Leuk und Umgebung Leuk
324. Spar- und Leihkasse Melchnau
325. Spar- und Leihkasse Münsingen
326. Spar- und Leihkasse Rebstein
327. Spar- und Leihkasse Riggisberg
328. Spar- und Leihkasse Steffisburg
329. Spar- und Leihkasse Thayngen
330. Spar- und Leihkasse Wynigen
331. Sparcassa 1816
332. Spargenossenschaft Mosnang
333. Sparkasse Engelberg
334. Sparkasse Horgen
335. Sparkasse Küsnacht
336. Sparkasse Oberriet
337. Sparkasse Oftringen
338. Sparkasse Schwyz
339. Sparkasse Thalwil
340. Sparkasse Trogen
341. Sparkasse Wiesendangen
342. Sparkasse Zürcher Oberland
343. Sparkasse des Sensebezirks
344. St.Gallische Kantonalbank
345. Swissfirst Bank AG
346. Swissnetbank.com AG
347. Swissquote Bank
348. Synthesis Bank
349. Tempus Privatbank AG
350. The Chase Manhattan Private Bank (Switzerland)
351. Thurgauer Kantonalbank
352. Tokai Bank (Schweiz) AG
353. Trafina Privatbank AG
354. Triba Partner Bank
355. UBS AG
356. UBS Card Center AG
357. UEB United European Bank
358. UniCredit (Suisse) Bank SA
359. Unibank SA Luxemburg, Zweigniederlassung Zürich
360. Union Bancaire Privée
361. United Bank AG
362. United Mizrahi Bank (Schweiz) AG
363. Urner Kantonalbank
364. VP Bank (Schweiz) AG
365. Valiant Bank
366. Valiant Privatbank AG
367. Volksbank Bodensee AG St.
368. Vorarlberger Landes- und Hypothekenbank AG
369. WIR Bank
370. Wegelin & Co. Privatbankiers
371. Westdeutsche Landesbank (Schweiz) AG
372. ZLB Zürcher Landbank
373. Zuger Kantonalbank
374. Zürcher Kantonalbank
375. Zürich Invest Bank AG
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