Market-based versus bank-based financial systems, Financial Management

Assignment Help:

What do you meant by market-based and bank-based financial systems?

Market-based versus bank-based financial systems implications.

The presence of market-based and bank-based financial systems emerges by comparing national banking structures on the basis of:

1. Integration of commerce and banking that can operate either by banks’ ownership of commercial firms or through commercial firms’ banks ownership. Into the USA and the UK there is almost no integration of banking and commerce. Though in both Germany and Japan there is a close relation between firms and banks. The higher amount of information obtainable to banks operating into Japan and Germany– within comparison to US/UK banks – assists in monitoring the firms and therefore reducing the moral hazard difficulty. Moral hazard is one of the difficulties intermediaries face while lending and illustrates the risk (hazard) which the borrower engages into activities which are undesirable immoral for the lender after the transaction is created.

2. Integration of the provision of bank and non-bank financial services. Each of banks financial services consider as to traditional deposit-based lending, when non-bank financial services are which investment, insurance, underwriting trust and property facilities. A high level of integration characterizes universal banks of Germany, in opposition to the traditionally low integration into the USA and UK. However remember that the regulations of USA/UK have currently been reformed, and higher degrees of integration are at this time possible. The other countries, as like France and Italy, have restricted forms of universal banking.


Related Discussions:- Market-based versus bank-based financial systems

Explain present value of a series of cash flows, Q. Explain Present Value o...

Q. Explain Present Value of a Series of Cash Flows? Present Value of a Series of Cash Flows: - In a business circumstances it is very natural that returns received by a firm ar

Calculate the amount invested in treasury bonds, You have an investment cap...

You have an investment capital of $1,000,000.  You plan to invest a portion of this money in Treasury bonds and the remainder in a stock portfolio.  Treasury bonds are expected to

Is conservatism an investment strategy, Q. Is Conservatism an investment st...

Q. Is Conservatism an investment strategy? Conservatism - An investment strategy aimed at long-term capital appreciation with low risk; moderate; cautious; opposite of aggressi

Operating cycle, Uses of operating cycle in business

Uses of operating cycle in business

Define is it preferable to use an import quota or a tariff, Suppose the gov...

Suppose the government wants to limit imports of a certain good.  Is it preferable to use an import quota or a tariff?  Why? Modification in domestic consumer and producer surp

Sales managers view on exchange risk, The sales manager considers that ther...

The sales manager considers that there will be substantial foreign exchange risk in trading with Werland. Payment is unpaid in Werland francs in three months time. The current ster

What is a marginal cost of capital schedule (mcc), What is a marginal cost ...

What is a marginal cost of capital schedule (MCC)?  Is the schedule always a horizontal line?  Explain. The marginal cost of capital schedule is a graphic representation of the

What is the maximum additional short-term funding, B.J. Industries has a cu...

B.J. Industries has a current ratio of 2.5, with $2.5 million in current assets.  Due to sales growth, the company wants to expand accounts receivable and inventories by

Explain pro forma financial statements management goals, Explain how manage...

Explain how management goals are incorporated into pro forma financial statements. Management put a target goal and forecasters makes pro forma financial statements under the

Regarding the assigment below, a-ii, should i calculate the co-variance of ...

a-ii, should i calculate the co-variance of the 30 securities?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd