BONDS

Bonds. Like any other type of investment vehicle, bonds provide investors with two kinds of income: (1) They provide current income, and (2) they can often used to generate varying amounts of capital gains. The current income is derived from the periodic receipt of interest payments. Capital gains, in contrast, are earned whenever market interest rates fall. 

VIDEO. The basics of bonds [see].

Pricing. A very basic rule in the market for fixed income securities is that interest rates and security prices move in opposite directions.

Key features. Type of issuer (governments, corporations), maturity, coupon and principal. 

Tenor / Maturity. In the US, 3-month to 1-year Treasury paper is called T-Bills; from 2 to 10 years, T-Notes; and T-bonds beyond that (30 years).

Balance sheet. Assets and liabilities! 

Size of the market. Government Bonds of US Commercial Banks, March 7 2012: $ 459.7 billion. Corporate Bonds. Corporate Bonds of US Commercial Banks, March 7 2012: $ 824.2 billion. Mortgage-Backed Securities. MBS of US Commercial Banks, March 7 2012: $ 1297.2 billion.

Case: UBS. From UBS's balance sheet [see, p. 43]. Exposure to French bonds: CHF 3525, of which CHF 2009 in corporate bonds, CHF 785 in sovereing bonds and CHF 730 in bank bonds. Bonds issued: CHF 158.
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CERTIFICATES OF DEPOSITS

Certificate of deposit. A certificate of deposit (CD) is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination.

CDs are generally issued by commercial banks and are insured by the FDIC (in the US). The term of a CD generally can range from one week to ten years. Retail certificates of deposit are defined as those under $100,000. Large time deposits are defined as deposits larger than $100,000.

Case. Sun Trust retail CDs [see].

Pricing. See Bankrate.com

Tenor / Maturity. 7 days to 10 years.

Balance sheet. Liabilities. Depositary sources of funds (non-depositary sources: bonds, borrowing from other banks, discount borrowing from the central bank).

Type of banking. Retail / corporate.

Size of the market. Retail deposits at US Commercial Banks, March 7 2012: $ 7.088.0 billion. Large time deposits at US Commercial Banks, March 7 2012: $ 1.499.0 billion. Source: US Federal Reserve.

See Adam Satariano: “Apple Seen Paying Some of $97.6 Billion in Cash as Dividend”, Bloomberg. Corporations are active players in the CD market!
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SAVINGS ACCOUNTS

Savings accounts. A deposit account held at a bank or other financial institution that provides principal security and a modest interest. Savings accounts are generally for money that you don't intend to use for daily expenses. Because savings accounts almost always pay lower interest rates than Treasury bills and certificates of deposit, they should not be used for long-term holding periods. Their main advantages are liquidity and superior rates compared to checking accounts.

VIDEO. HSBC paying an extra-high interest rate: lool at the date! [see]

Pricing I. Short-term interest rates. See Bankrate.com

Pricing II. Maintenance fees: Sun Trust [see]. "Tiered interest rates": a pre-set scale of interest which is based on the premise that higher sums of money earn higher rates of interest.

Type of banking. Retail / Corporate.

Balance sheet. Liabilities. Depositary sources of funds (non-depositary sources: bonds, borrowing from other banks, discount borrowing from the central bank).
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DEMAND DEPOSITS

Checking accounts. A transactional deposit account held at a financial institution that allows for withdrawals and deposits. Money held in a checking account is very liquid, and can be withdrawn using checks, automated cash machines and electronic debits, among other methods. A checking account differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both. Checking accounts can include business accounts, student accounts and joint accounts along with many other types of accounts which offer similar features. In exchange for the liquidity, checking accounts typically do not offer a high interest rate. A checking account may also be called a "demand account" or "transactional account" [see].

Case. Excellent HSBC product description (retail) [see]. Note the attached product features.

VIDEO. Business Checking Account Comparison [see]; Citibank Mobile Check Deposit [see].

Pricing I. There may be some monthly maintenance fees in the case of large checking accounts [see].

Pricing II. There is a price to pay for overdraft protection! SunTrust [see]: "It’s not uncommon to occasionally get caught short of funds in your checking, savings, or money market account. When that happens, it’s helpful to have a backup plan to avoid bouncing a check or getting stranded at the ATM. Overdraft Protection: Sign up for this service and we’ll link your checking, savings, or money market account to your other SunTrust accounts and transfer the necessary funds to cover any shortfalls. As long as you have sufficient funds in your linked accounts, you’ll pay only a single $12.50 transfer fee on the day the overdraft occurs.

Balance sheet. Liabilities. Depositary sources of funds (non-depositary sources: bonds, borrowing from other banks, discount borrowing from the central bank).

Type of banking. Retail / Corporate.

Size of the market. Retail deposits at US Commercial Banks, March 7 2012: $ 1.872.3 billion.
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TRADE FINANCE

Trade finance. See Deutsche Bank information on Flow Prodcuts and Structured Trade and Export Finance.

Balance sheet. Assets.

Type of banking. Corporate banking.
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COMMERCIAL & INDUSTRIAL LOANS

Commercial & industrial loans. Any type of loan made to a business or corporation and not to an individual. Commercial and industrial loans can be made in order to provide either working capital or to finance major capital expenditures. More info.

Case. Sun Trust lines of credit [see].

Balance sheet. Assets.

Type. In most cases a line of credit is secured by business assets, but an unsecured option may be available if certain credit conditions are met.

Maturity. Short-term (working capital); long-term (major capital expenditures)

Type of banking. Retail (small businesses lines of credit); Corporate (project financie, etc.)

Pricing. Variable interest rates (lines of credit: revolving credit, short term); Fixed interest rates (major financial capital expenditures: non-revolving credit, ling-term)..

Size of the market. Commercial & Industrial loans of US Commercial Banks, March 7 2012: $ 1379.3 billion.

Financial Times. "The UK offshore wind industry is heavily dependant on banks for project finance. This is not always easy in an inmature industry where the risks are often deemed complex and big. But now bank finance is not as easy as it was. 'Project finance is tight', says John Wood, a partner at the Norton Rose law firm. Traditionally, on project finance you would get a 15-yeaer repayment schedule for your debt. This has fallen to six or seven years, wich adds pressure when it is time to refinance. At the end of 2011, the UK had 636 turbines in 18 wind farms, accounting for more than 2 gigawatts of installed capacity -- the Saudi Arabia of offshore wind". Pilita Clark: "Financing woes pose a threat to 2020 target date", FT, June 4, 2012.
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CONSUMER LOANS

Consumer loans. Consumer loans are loans for purchasing automobiles and mobile homes, student loans, loans for medical expenses and vacations, and loans for other personal expenditures. They come in a variety of sizes and shapes. The following examples are all products offered by Sun Trust in the USA [see]. Equity loans: put your home’s equity to work for you with a range of home equity lending solutions. Auto Loans: explore the benefits of refinancing or get approved before you shop for a new or used vehicle). Physician Loans: cover a wide range of personal and business expenses with our physician loans. Personal Loans: obtain the funds you need with our affordable and flexible personal loans and lines of credit. Marine and Boat Loans: finance the purchase of a new or used boat or explore the benefits of refinancing. Education Loans: meet your college financing needs with private student loans.

See also Banco Santander (UK) Personal loans [see].

VIDEO. HSBC Personal loans [see; language unknown] (0:36); City Bank Texas home improvement loans (0.33) [see]; auto loans (0.32) [see].

Tenor. Medium to long-term.

Balance sheet. Assets.

Type. Unsecured (except auto loans, boat loans).

Pricing. Variable interest rates. See Bankrate.com

Type of banking. Retail.

Size of the market. March 7 2012: $ 1093.4 billion in the US.

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