Reprivatisation of bank lending should proceed naturally as commercial banks offer positive nominal interest rates and bid funds away from the postal saving system.
Analysts said Friday that deals are likely, especially as regulatory scrutiny over lending standards forces stand-alone mortgage companies to find deeper pockets of capital and as commercial banks bow out of the business.
Other institutions, such as commercial banks and investment banks, in the U.S. and around the world, based what they thought was an acceptable distribution of risk in their portfolios on the ratings these agencies gave various securities.
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Tuesday, Treasury Secretary Henry Paulson told the Chamber of Commerce that investment banks should be more closely scrutinized by the Federal Reserve (make that scrutinized at all, really) now that they enjoy the privilege of borrowing short-term funds directly from the central bank, just as commercial banks have been allowed to do for years.
"We still have a nice book of NRI clients and we want to grow this business, but we won't be as aggressive as the commercial banks, " said Mr. Kong.
As investment banks begin behaving more like commercial banks and receiving back-up from the government Dodd says they should also be subjected to more regulations, just like commercial banks.
The United States outgrew it as early as 1810 or so, as dozens and then hundreds of commercial banks began issuing gold-linked paper banknotes as an alternative to metal coins.
That's the loans they'll make directly to banks, but not just to commercial banks as usual but also to securities dealers, which is something they haven't done since the Great Depression.
As a result, commercial banks' lending to small firms jumped to 10 trillion won during the first nine months of this year (14 times as much as for the whole of last year).
The recruiting of an entirely new group of lenders -- including securities firms, pension funds, insurance companies, corporations and even individuals -- diversifying away from sole reliance on Western governments and commercial banks as sources of funding.
The biggest decline on its balance sheet was in loans to foreign central banks, which could imply that those banks don't face as much demand for dollars from panicky commercial banks in their own nations.
Commercial banks such as Citi FX Pro offer FDIC insurance protection and segregation protection in bankruptcy.
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NatWest's predicament is the same as that of most other commercial banks around the world that are trying to barge into the big league of investment banks.
Mr Cable suggested in his speech that the future business bank could work with commercial banks such as the UK's Co-Op, and the British operation of Swedish lender Handelsbanken.
As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall.
After all, they say, many of the worst elements of the Glass-Steagall act have been disabled by the courts or by regulators such as the Federal Reserve reinterpreting what commercial banks are allowed to do.
Not only that, but it was unclear what exactly the target should be, since money could be defined in different ways: narrowly, as cash and demand deposits held with commercial banks, or broadly, including savings deposits with other financial institutions.
From there, commercial banks can access the cash as they have need.
The fishing village of Wanchese, near the Outer Banks, was bustling Friday as commercial fishermen secured their boats against the likely storm surge.
They have financed this growth in their assets through increased liabilities such as commercial-bank reserves, swaps with central banks and other ways of printing money.
Commercial banks fund themselves with deposits as well as debt.
For example, following lengthy comment periods, in 2006, the federal banking supervisors issued formal guidance on underwriting and managing the risks of nontraditional mortgages, such as interest-only and negative amortization mortgages, as well as guidance warning banks against excessive concentrations in commercial real estate lending.
In particular, a financial aid package for Poland should avoid transferring credit risk from private commercial banks to Western governments and taxpayers as a way of covering and thereby encouraging loans from private credit markets.
While Wall Street and Washington fret about how badly investment banks could damage the economy, Tuesday provided a fresh reminder that commercial banks could be a bigger problem as the second wave of the credit crisis begins its run.
Signature Bank ( SBNY - news - people ) in New York City as the institution hired away experienced commercial loan officers from other banks.
This liquidity, the government hopes, will keep ailing industrial companies afloat, as the merchant banks use the windfall to buy yet more commercial paper.
This is a flow variable and so should largely exclude currency valuation effects, but the drawback is that it will usually overstate the amount of official FX intervention as it includes monthly foreign exchange transactions by the PBoC and commercial banks.
It involved investment banks failing due to traditional commercial banking activities, such as issuing and holding mortgage backed securities.
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Last week the country once seen as Latin America's Switzerland, because of its flourishing banks and commercial tranquillity, edged towards chaos.
But commercial and industrial lending rose sharply during the third quarter, as banks stepped in where the capital markets had pulled back.
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