The future of banking and finance

The future of Banking And Finance

BANKING-----The term fiance refers to a person to whom you are engaged to be married. The term fiance can refer to either the future bride or groom.

FINANCE-----1. A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.

2. To raise money through the issuance and sale of debt and/or equity.

The Future of Finance: International Edition

By SIMON JOHNSON

Today's Economist

Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.”

Bankers and hedge fund managers are fond of saying, “If you place restrictions on our activities in New York, we’ll just move elsewhere — like London.” This makes attitudes toward the financial sector in other countries — particularly Britain — highly relevant to the American public policy debate on financial regulation.

The benefits from banking, broadly defined, on its current scale and with its existing incentive structure are, at best, very limited. In contrast, the costs — both in the recent past and the likely future — are large and quite frightening. The fiscal position of Britain has been ruined by the measures the previous government put in place to support the big banks, directly and indirectly. Whatever your assessment of the fiscal-austerity measures being pushed hard by the new government, there is no question that much of the underlying problem arises from the continuing failure of financial regulation.

BANKING & FINANCE------Banking finance definition gives us information about the definition of banking and the definition of finance.

Banking refers to that process in which a bank which is a commercial or government institution offers financial services that include lending money, collection of deposits, issue of currencies and debit cards, and transaction processing etc. The majority of banks works as profit-seeking enterprises, however, a few government banks work as non-profit organizations. Central banks function as government agencies and they regulate the interest rates and circulation of money in the total economy.

The activities of banks can usually be categorized into the following types

* Receiving deposits from the customers and issue of current or checking accounts and savings accounts to businesses and individuals

* Providing financial consultation services to individuals and businesses

* Providing loans to businesses and individuals

* Encashment of checks

* Facilitation of monetary transactions, for example cashiers checks and wire transfers

* Issue of ATM cards, credit cards, and debit cards

* Offering safe deposit vaults for keeping valuables

* Encashment and distribution of bank rolls

* Retirement & pension planning

Banks can be widely categorized into two types:

Retail banks: These include

* Commercial banks

* Postal savings banks

* Private banks

* Community banks

* Community development banks

* Savings banks

* Building societies

* Offshore banks

Retail banking directly deals with small businesses and individuals, commercial banking, corporate banking services to important commercial organizations, and offering services to mid-market businesses.

Investment banks: The investment banks function as underwriters of stock and bond issues and also provide a number of related services. Examples of investment banks are merchant banks and venture capital firms. As a whole, investment banking deals with capital markets.

The financial transactions of a bank are carried out through a number of measures:

* Through branches

* Through ATMs (automated tellering machine)

* Telephone banking

* Online banking

* Through mail services

Finance deals with efficient allocation and distribution of resources by commercial entities, individuals, as well as other establishments over time taking into consideration the associated risks.

The term called finance can include any of the following areas:

* The process of managing money

* The study of money and other types of assets

* Managing and controlling those assets

* Identifying and handling project risks

If the term finance is used as a verb, it denotes provision of funds for individuals for buying cars or houses and businesses.

The function of finance is to apply a group of techniques which the corporate entities and individuals implement for managing their financial activities, specifically the margin of income and expenditure as well as investment risks.

Finance can be widely categorized into the following types:

* Personal finance

* Business finance

* Public finance

The major sources of financing include:

* Savings

* Loan or credit

* Taxes

* Donations

* Subsidies

* Grants

What is involved in Banking & Finance Law?

A major portion of work in Banking & Finance is of a transactional nature; you will complete your part in the transaction and move on to the next. A return to a completed transaction becomes necessary when disputes arise, constituting the contentious element of a Banking & Finance lawyer’s work. As a lawyer in this field, you can choose to specialize in a particular class of financing. These include project, acquisition, asset, property and islamic finance as well as securitisation, derivatives and capital markets.

Project finance normally involves making loans for various projects, while acquisition finance focuses on the lending on money to companies to purchase other entities. Asset finance, likewise, focuses on loans, however it is regarding the purchase or leasing of big-ticket items instead. There is straight-forward lending by a bank or other financial institution, and then there is Securitisation, when a lender offloads its loan portfolio to another company. Derivatives focus on the fixing of currency rates during a transaction and capital markets is where a borrowing entity issues bonds to investors. Another huge area, islamic finance, involves transactions or loans that comply with Shariah principles.

Across all modes and segments of finance, a lawyer will be required to assist with negotiations, provide assistance in structuring deals and complete due diligence on other parties, usually the borrowing entity. You will also act as a mediator between parties, helping all to reach common terms that are satisfactory to all involved. Throughout all of this, you will have to ensure that the deal is in line with all laws and regulations of the particular jurisdictions they involve, as well as completing formalities such as registration.

What is need for Banking & Finance Law?

Qualifications necessary to be a Banking & Finance lawyer are: an outstanding academic background, high knowledge levels in your specialist area, keen commercial awareness and an understanding of market realities.

You will have to analyze and predict future trends which may likely impact the transaction or deal and communicate this is a clear and concise way to your clients.

As such, paying attention to every detail and having an exact knowledge of the fine-print is essential.

A familiarity with legislation and regulatory mechanisms in countries where you clients have or are likely to have business interests and being able to reduce complex definitions and terminology into simple language clients can understand is invaluable. As with most high-level jobs, the ability to produce high-quality work consistently regardless of time constraints or deadlines is standard.

Current climate in Banking & Finance Law?

The US sub-prime market crisis has affected economies worldwide. Lending has been drastically reduced and a credit crunch has limited potential growth across most sectors. With too many players in the field, competition in the Banking & Finance legal services domain is extremely fierce.

Recent trends in the market include growth of investment funds taking on lending roles replacing banks as traditional lenders. Competition among financial institutions to grow their businesses have meant that borrowers have had plenty of options available for securing loans, though this has slowed down considerably with the credit crunch.

Banking & Finance litigation is also on the rise with insolvency cases increasing; money-laundering has become a major regulatory focus area and enforcement in general has picked up momentum in most economies.

CONCLUSION

* Banks provide security and convenience for managing your money and sometimes allow you to make money by earning interest. Convenience and fees are two of the most important things to consider when choosing a bank.

* Writing and depositing checks are perhaps the most fundamental ways to move money in and out of a checking account, but advancements in technology have added ATM and debit card transactions and ACH transfers to the mix.

* All banks have rules about how long it takes to access your deposits, how many debit card transactions you're allowed in a day, and how much cash you can withdraw from an ATM. Access to the balance in your checking account can also be limited by businesses that place holds on your funds.

* Debit cards provide easy access to the cash in your account, but can cause you to rack up fees if you're not careful.

* While debit cards encourage more responsible spending than credit cards, they do not offer the same protection or perks to consumers.

* Regularly balancing your checkbook or developing another method to stay on top of your account balance is essential to successfully managing your checking account and avoiding fees and bounced checks.

* If you have more money than you need to manage your day-to-day expenses, banks offer a variety of options for saving, including money market accounts, CDs, high-interest online savings accounts and basic savings accounts.

* To protect your money from electronic theft, identity theft, and other forms of fraud, it's important to implement basic precautions such as shredding account statements, having complex passwords and only doing online banking through secure internet connections.