Book description
Stuart Greenbaum and Anjan Thakor bring a unique analytical approach to the subject of banks and banking in this completely revised and updated new edition. They expand the scope of the typical bank management course by addressing all types of deposit-type financial institutions and by explaining the why of intermediation rather than simply describing institutions, regulations, and market phenomena. This analytic approach strikes at the heart of financial intermediation by explaining why financial intermediaries exist and what they do. Specific regulations, economies, and policies will change, but the underlying philosophical foundations remain the same. This approach enables students to understand the foundational principles and to apply them to whatever context they encounter as professionals."This book is the perfect liasion between the microeconomics realm of information economics and the real world of banking and financial intermediation. It supplies a healthy dose of microeconomic theory to fully understand the underlying features of the most common financial instruments used in modern banking practice, all explained thoroughly with down to earth narratives and doable math/game theoretic instruments. It makes a wonderful preview before going on with Freixas text, or at least as its companion."
--Quote referring to first edition from Enrique Fernandez on amazon.com
* Completely undated edition of a classic banking text
* Online solutions manual, instructor resources, and ppt slides available to instructors on publisher's website
* Authored by experts on financial intermediation theory, only textbook that takes this approach situating banks within microeconomic theory
Table of contents
- Cover image
- Title page
- Table of Contents
- Copyright
- Dedication
- Preface
- Acknowledgments
- About the Authors
- PART I: THE BACKGROUND
-
PART II: WHAT IS FINANCIAL INTERMEDIATION?
-
Chapter 2: The Nature and Variety of Financial Intermediation
- Glossary of Terms
- Introduction
- What Are Financial Intermediaries?
- The Variety of Financial Intermediaries
- Depository Financial Intermediaries
- Commercial Banks
- Thrifts
- Credit Unions
- Nondepository Intermediaries
- The Role of the Government
- Financial Intermediaries on the Periphery
- Conclusion
- Appendix 2.1 Measurement Distortions and the Balance Sheet
- Appendix 2.2 Guide to Federal Reserve Regulations
-
Chapter 3: The What, How, and Why of Financial Intermediaries
- Glossary of Terms
- Introduction
- Fractional Reserve Banking and the Goldsmith Anecdote
- The Evolution of the Primitive Goldsmith Into a Bank
- A Model of Banks and Regulation
- The Macroeconomic Implications of Fractional Reserve Banking: The Fixed Coefficient Model
- Large Financial Intermediaries
- How Banks Can Help to Make Nonbank Financial Contracting More Efficient
- The Empirical Evidence: Banks Are Special
- Ownership Structure of Depository Financial Institutions
- The Borrower’s Choice of Finance Source
- Conclusion
- Appendix 3.1 The Formal Analysis of Large Intermediaries
-
Chapter 2: The Nature and Variety of Financial Intermediation
-
PART III: MAJOR “ON-BALANCE-SHEET” RISKS IN BANKING
-
Chapter 4: Major Risks Faced by Banks
- Glossary of Terms
- Introduction
- The Source of Business Risk
- Credit, Interest Rate, and Liquidity Risks
- The Term Structure of Interest Rates
- Duration
- Convexity
- Interest Rate Risk
- Liquidity Risk
- Conclusion
- Case Study Eggleston State Bank
- Appendix 4.1 Dissipation of Withdrawal Risk Through Diversification
- Appendix 4.2 Lender-of-Last-Resort Moral Hazard
-
Chapter 5: Spot Lending
- Glossary of Terms
- Introduction
- Description of Bank Assets
- Types of Bank Loans
- What Is Lending?
- Loans Versus Securities
- Structure of Loan Agreements
- Informational Problems in Loan Contracts and the Importance of Loan Performance
- Credit Analysis: The Factors
- Sources of Credit Information
- Analysis of Financial Statements
- Loan Covenants
- Conclusion
- Case Study Indiana Building Supplies, Inc.
- Appendix 5.1 Trends in Credit Analysis
-
Chapter 6: Further Issues in Bank Lending
- Glossary of Terms
- Introduction
- Loan Pricing and Profit Margins: General Remarks
- Credit Rationing
- Bank Capital and Credit Rationing
- The Spot Lending Decision
- Long-Term Bank-Borrower Relationships
- Long-Term Relationships and Moral Hazard
- Loan Restructuring and Default
- Conclusion
- Case Study Zeus Steel, Inc.31
- Chapter 7: Special Topics in Credit: Syndicated Loans, Loan Sales, and Project Finance
-
Chapter 4: Major Risks Faced by Banks
-
PART IV: OFF THE BANK’S BALANCE SHEET
-
Chapter 8: Off-Balance Sheet Banking and Contingent Claims Products
- Glossary of Terms
- Introduction
- Loan Commitments: A Description
- Rationale for Loan Commitments
- Pricing of Loan Commitments
- Loan Commitments and Monetary Policy
- Other Contingent Claims: Letters of Credit
- Other Contingent Claims: Swaps
- Other Contingent Claims: Credit Derivatives
- Risks for Banks in Contingent Claims
- Regulatory Issues
- Conclusion
- Case Study Youngstown Bank
-
Chapter 9: Securitization
- Glossary of Terms
- Introduction
- Preliminary Remarks on the Economic Motivation for Securitization and Loan Sales
- Different Types of Securitization Contracts
- Going Beyond Preliminary Remarks on Economic Motivation: The “Why,” “What,” and “How Much Is Enough” of Securitization
- Strategic Issues for a Financial Institution Involved in Securitization
- Comparison of Loan Sales and Loan Securitization
- Conclusion
- Case Study Lone Star Bank
-
Chapter 8: Off-Balance Sheet Banking and Contingent Claims Products
- PART V: THE DEPOSIT CONTRACT
- PART VI: BANK REGULATION
- PART VII: OVERALL MANAGEMENT OF THE BANK
- PART VIII: CORPORATE CONTROL AND GOVERNANCE
- PART IX: THE FUTURE
- Index
Product information
- Title: Contemporary Financial Intermediation, 2nd Edition
- Author(s):
- Release date: March 2007
- Publisher(s): Academic Press
- ISBN: 9780080476810
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