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

Regular payback period, The director of capital budgeting for a firm has re...

The director of capital budgeting for a firm has recognized two mutually exclusive projects, A and B, with the following expected net cash flows:

Functions of financial manager, Functions of Financial Manager: - The finan...

Functions of Financial Manager: - The financial manager is a associate of top management. He is intimately associated with the formulation of financial policies as well as financia

What is an audit?, Question 1 What is Depreciation? Question 2 What a...

Question 1 What is Depreciation? Question 2 What are the elements of an accounting system? Question 3 How do you prepare Flexible Budget? Question 4 Briefly explain

Mutual fund services, Mutual Fund Services: Financial Mutual Funds laun...

Mutual Fund Services: Financial Mutual Funds launch schemes to cater to the need of the different categories of investors. They provide special services in addition to the retu

The mechanism of a swap in risk management, QUESTION i) Discuss the ris...

QUESTION i) Discuss the risk associated with changes in exchange rates. ii) How can these risks be managed internally? iii) Explain how a manager can use a forward contra

What is gross dividend, Gross dividend At the ending of the financial ...

Gross dividend At the ending of the financial year companies will announce the profits or losses that they have earned and a figure for net profit after tax. A company is able

Activity-based budgeting - abb, It is a method of budgeting in which the ac...

It is a method of budgeting in which the actions that incur costs in every functional area of a company are recorded and their relationships are defined and evaluated. Activities a

Types of t-bills, Types of T-Bills In the US markets, though there ar...

Types of T-Bills In the US markets, though there are many types of T-bills, they can be broadly classified into two types - regular-series bills and irregular-series bills.

Explain the nature of a concessionary loan, What is the nature of a concess...

What is the nature of a concessionary loan and how is it handled in the APV model? A concessionary loan is a loan that is provided by a governmental body at below the normal ma

Why do we need to learn finance, Why do we need to learn finance The qu...

Why do we need to learn finance The questions that you may thinking about right now are "Why do we need to learnfinance?  Shall we not leave it to people who are going to speci

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