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[ 678 ]

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I N D E X

21st-Century issues, banking, 72 – 85 Abbey 95, 174, 222 – 42

ABC see Agricultural Bank of China

ABN Amro

249 – 50, 536

abnormal returns

definition

521 – 2

M&As

521 – 6

absolute price risk see delta

ABSs see asset-backed securities acceptances 42

accepting houses, concepts 22 accountability issues, emerging markets 290

accounting standards

58, 214 – 18, 474 – 5

harmonisation needs 217 – 18

IASB 214 – 18, 234, 299, 474

international comparisons 58, 217 – 18

Islamic banking

330

output measures

474 – 5

ACHs see automated clearing houses

acquisitions see mergers. . .

administration costs

3

see also intermediation. . .

advanced IRB approach (AIRB), Basel 2 Accord 193, 195 – 219

advanced measurement approaches (AMAs),

Basel 2 Accord

201 – 2, 203 – 5,

210

 

 

adverse selection, concepts

6 – 7, 38

 

Africa 292

 

 

agency problems, concepts

6 – 7, 38, 225,

353 – 6, 531 – 3

 

 

aggregate credit exposures, concepts

161 – 2

Agricultural Bank of China (ABC)

306 – 8

AIB see Allied Irish Bank

 

 

AIRB see advanced IRB approach

 

Alchian, A. 5

 

 

Algeria 338 – 9

 

Allfirst Bank 388 – 9, 392 – 3

Alliance and Leicester

222 – 42

Allied Irish Bank (AIB)

111, 388 – 9,

392 – 3

 

Allied United Bank of Kuwait 326 – 7

allocative inefficiencies, concepts 478 ALM see asset-liability management

AMAs see advanced measurement approaches AMCs see asset management corporations announcement effects, M&As 520 – 5 APACS see Association for Payments Clearing

Services

 

approved credit institutions

56

arbitrage

 

 

LTCM

455 – 9

 

regulatory capital arbitrage

185 – 6

Argentina

66, 108, 112, 288 – 90, 338 – 41,

360, 410 – 13, 465

 

Armenia

305

 

asset growth, statistics 73 – 85

asset management corporations (AMCs)

310 – 11, 427 – 8

 

asset transformations

 

see also pooled assets

 

concepts

3 – 5

 

asset-backed securities (ABSs)

 

see also collateralised. . .; mortgage. . .

concepts

44 – 51, 97, 326 – 9

definition 45

 

international comparisons

49 – 51

statistics

45 – 51

 

steps 45 – 6

asset-backed transactions, Islamic banking 325 – 9

asset-liability management (ALM)

xiv – xv,

 

23, 41 – 2, 72, 101 – 72, 390 – 1

concepts

xiv – xv, 23, 41 – 2, 72, 101 – 3,

 

109, 113 – 25, 390 – 1

 

 

duration analysis

xv, 120 – 4

 

duration gap analysis xv, 122 – 4

 

examples

113 – 25

 

 

gap analysis

118 – 24

 

 

interest-rate risk

113 – 18

 

 

liquidity risk

124 – 5

 

 

assets

1 – 39

 

 

 

 

Association for Payments Clearing Services

 

(APACS)

9 – 11

 

 

asymmetric information, concepts

6 – 7,

 

37 – 8, 42, 57, 225, 353 – 4

 

ATMs see automated teller machines

 

auditors

230, 237, 301, 330, 366 – 7, 378 – 86,

 

394 – 5

 

 

 

 

Australia

209, 238, 395 – 403

 

 

Austria

53 – 4, 68, 237 – 8, 282, 360 – 1, 482,

 

490 – 4, 535

 

 

automated clearing houses (ACHs)

11 – 12

automated teller machines (ATMs)

 

concepts

9 – 15, 70, 91 – 2, 95, 474 – 5,

 

483 – 4

 

 

 

 

international comparisons

13 – 15

rival charges

11

 

 

statistics

9 – 10, 13 – 15, 91 – 2

 

BACs, concepts

9 – 10

 

 

Banamex

69

 

 

 

 

Banco Ambrosiano

180 – 1, 362 – 3,

 

393 – 5

 

 

 

 

Bancomer

xviii, 69 – 70, 581 – 94

 

Bank Advisory Committee, EU

271 – 2,

 

283 – 5

 

 

 

 

Bank of America

 

92 – 3, 243

 

 

Bank America

519

 

 

Bank of Canada

35, 389 – 90

 

 

Bank of China

305 – 17

 

 

Bank of Credit and Commerce International

 

(BCCI)

 

102, 231, 242, 367,

 

376 – 80, 386 – 7, 393 – 7, 460

Bank of England

 

xv, 29 – 36, 134, 161 – 2,

 

213, 228 – 35, 237 – 42, 280, 283 – 6,

359 – 61, 366 – 7, 376 – 86, 394 – 5, 459 – 61

see also central banks

[ 683 ]

I N D E X

background 228 – 35, 237 – 42, 359 – 61, 366 – 7, 376 – 86, 394 – 5, 459 – 61

financial stability 237 – 8, 459 – 61 Monetary Policy Committee 31 – 2, 34, 36,

231 – 2, 283

 

roles 230 – 2, 237 – 8, 241 – 2, 366 – 7,

380 – 1, 459 – 61

 

Bank of England Act 1844

459 – 61

Bank of England Act 1998

34, 36, 237,

460 – 1

 

bank failures see failures

 

bank holding companies (BHCs), concepts

xiv, 24 – 5, 247 – 59

 

Bank Holding Company Act 1956, USA

24 – 5, 247 – 9, 256 – 7

‘bank holidays’

354 – 5

Bank for International Settlements (BIS)

110, 180, 193 – 4

Bank of Japan

36, 258 – 64

Bank of New England Corporation (BNEC)

46, 375 – 6

 

Bank of New York

15

Bank One Corp.

 

243 – 50, 519, 536

bank runs

32 – 3, 38, 176, 179 – 80, 253 – 4,

329, 353 – 6, 360 – 1, 407 – 8, 423 – 36,

454, 462 – 7

see also crises

 

 

Bank of Scotland

11

bank statements, costs 4 – 5

Bankers Trust (BT)

xviii, 19, 139 – 42, 175,

631 – 52

 

activities

632 – 3, 635 – 43

background

631 – 52

Deutsche Bank

631 – 2, 651 – 7

evolution

632 – 3

M&As

644 – 50

new strategies

642 – 4

structural issues

632 – 6

swaps troubles

 

640 – 3

Bankhaus Herstatt

xvii, 102, 106, 169, 180,

361, 393 – 4, 398

banking

see also individual topics

21st-Century issues 72 – 85

case studies

xi – xii, xviii – xix, 358 – 90,

414 – 67, 541 – 652

 

concepts

xi – xii, xiii – xix, 1

– 39, 41, 51,

86 – 9, 101 – 2, 473 – 539

 

[ 684 ]

I N D E X

banking (continued)

 

crises xi – xii, xvi – xvii, 8, 32 – 3, 102, 108,

128, 156, 161

– 2, 176, 179 – 80, 212,

230, 242, 244

– 6, 252 – 5, 260 – 2,

288

– 9, 296 – 305, 337 – 47,

351

– 406 – 71

 

definitions

xiii – xiv, 1 – 5

future prospects

72 – 3, 83 – 98

microeconomic issues

xi – xii, 105 – 6,

 

176

– 219

 

 

overview

 

xi – xix, 1 – 39

statistics

9 – 18

 

 

top players

15 – 18, 206, 222 – 59, 439 – 40,

 

511

– 15

 

 

types

xviii, 7 – 8, 474 – 7

Banking Act

1933

 

see also Glass Steagall. . .

USA

19 – 20, 247 – 51, 461

Banking Acts, UK

228, 230 – 5, 367

banking books, risk management 101 – 72

Banking Code

232 – 3

 

banks

 

 

 

 

 

see also central. . .; commercial. . .;

investment. . .

 

‘big four’

11, 88, 222 – 42

case studies

xi – xii, xviii – xix, 358 – 90,

 

414

– 73, 541 – 652

concepts

 

xi – xii, xiii – xix, 1 – 39, 41, 51,

 

86 – 9, 101 – 2, 230 – 2, 473 – 539

core functions

15, 474 – 7

definitions

xiii – xiv, 1 – 5, 230 – 2

failures

xi – xii, xvii, xviii, 32 – 5, 102, 105,

 

156, 161 – 2, 174 – 7, 180 – 1, 241 – 2,

 

260

– 2, 303 – 4, 351 – 471, 616 – 31

future prospects

72 – 3, 83 – 98

qualifying conditions

230 – 1, 245 – 6

rescues

xvii, xviii, 33, 50 – 1, 162, 174 – 5,

 

179

– 80, 237 – 8, 245 – 6, 352 – 90,

 

395

– 6, 424 – 36, 436 – 50, 453 – 5,

 

459

– 67, 609 – 11

 

roles

xi – xii, xi – xix, 1 – 39, 41, 51, 86 – 9,

 

101

– 2, 175 – 6, 474 – 7

statistics

9 – 18

 

 

theories

xiii – xiv, 1 – 39

top players

15 – 18, 206, 222 – 59, 439 – 40,

 

511

– 15

 

 

types

xi – xii, xiv, 1, 19 – 25

Banque du France

34

 

Barclays Bank plc

11, 89, 95, 127, 169 – 71,

222 – 42, 511

background

169 – 71, 222 – 42

risk management

169 – 71

Baring Brothers

xvii, 359

Barings Bank

xvii, 22, 67, 102, 111, 208, 222,

231, 242, 381 – 6, 390 – 1, 393 – 4,

396 – 7, 461

barriers

 

 

to entry 478, 495 – 509

to free trade

68 – 70, 289

Basel 1 Accord (1988) xv, 173, 179,

181 – 219, 261 – 3, 309 – 10, 317 – 18,

354, 404, 574

background

181 – 219, 354

critique 184 – 6, 193

examples

182 – 4

Basel 2 Accord

xv, 112, 146 – 8, 152 – 3, 173,

185, 192 – 219, 261 – 3, 280 – 3, 354,

393

 

 

 

advanced IRB approach

193, 195 – 219

alternative approaches

210 – 13

background

192 – 219

 

 

complementary approaches

210 – 13

critique 203 – 10

 

 

economic cycles 203 – 10

 

objectives

193 – 4, 203 – 4

 

pillar 1 approach (risk assets ratio)

192 – 219

 

 

pillar 2 approach (supervisors)

194 – 9,

202 – 10

pillar 3 approach (market discipline) 194 – 5, 198, 203 – 10

standardised approach

193, 195 – 219

three-pillar approach

192 – 219

USA 193, 205 – 7, 208

Basel Amendment (1996)

186 – 92

Basel capital ratio

46, 110, 182 – 219,

309 – 10, 393, 404, 443, 574

Basel Committee

xii, xv, 110, 124, 146 – 8,

169, 173, 179 – 219, 234 – 5, 261 – 3, 284 – 6, 393

see also international regulations background 179 – 219, 393 roles 180 – 2, 214 – 18

Basel Concordat (1975) 180, 395 Revised Basel Concordat (1983) 180 – 1,

395

Basel risk definition

169, 182 – 219

basis interest-rate swaps, concepts 138

basis rate swaps, concepts 134 – 7

basis risk, concepts

134 – 5

BBVA

69 – 70, 535 – 6

BCCI see Bank of Credit and Commerce

 

International

BCH see British Commonwealth Holdings

Bear Sterns

21

 

 

behavioural finance

408 – 10, 412

Belarus

305

 

 

 

Belgium

13 – 15, 18, 51 – 5, 67, 74 – 85, 180,

 

284, 482, 490 – 2, 502 – 6

Bermuda

64

 

 

 

BHCs see bank holding companies

bid-offer spreads

5, 90

‘Big Bang’

 

 

 

Japan

260 – 3, 285 – 7, 434 – 50, 467 – 71

UK

227 – 30

 

 

‘big four’ banks, UK

11, 88, 222 – 42

‘big six’ banks, USA

242 – 59

bilateral commitments, South East Asia

 

424 – 36

 

 

bills of exchange

22

BIS see Bank for International Settlements

Blodget, Henry

20

 

Blue Arrow

29

 

 

BNEC see Bank of New England Corporation

Bondclick

90

 

 

bonds

41 – 2, 44 – 51, 59, 72, 89 – 90, 107 – 8,

 

134 – 5, 182 – 3, 317 – 18, 560 – 1

CBOs

48 – 51

 

concepts

41 – 2, 44 – 51, 59, 72, 89 – 90,

 

107 – 8, 134 – 5, 182 – 3, 560 – 1

convertible bonds

44

emerging markets

333 – 47

eurobonds

44, 59

future prospects

89 – 90

loan finance

3

 

market trends

59

statistics

44 – 51

 

types

44 – 5

 

 

booms, concepts

408 – 9, 450 – 5

bootstrapping approaches, VaR 148

Bradford and Bingley

222

Brady bonds

346 – 7

branch regulations, USA 251 – 3

[ 685 ]

I N D E X

Brazil 288 – 9, 300, 338 – 41, 359 – 60, 413, 465

Bristol and West 222

British Commonwealth Holdings (BCH) 27 broad money, concepts 31 – 2

broker dealers

see also investment banks

concepts

23 – 4

brokers, concepts

22, 227 – 8

BT see Bankers Trust

bubbles

 

 

 

concepts

408 – 12, 414 – 15, 434 – 50,

 

450 – 5, 572 – 82

definition

408

Buffet, Warren

457 – 9

building societies

1, 16 – 18, 222 – 42, 485 – 8,

 

491 – 2, 514, 526 – 7

Bulgaria

305

 

Bundesbank

34, 263 – 6

CADs see Capital Adequacy Directives

Cahoot

94 – 5

 

call options

 

 

see also options

 

concepts

129 – 33

Calvo, Roberto

180, 362 – 3

CAMEL scores, USA 245 – 7, 256 – 7

Canada

xiv, 13 – 15, 18, 25, 51 – 5, 58, 66 – 8,

73 – 85, 174, 178, 180, 237, 240, 242,

249 – 50, 275, 292, 389 – 91, 507,

514 – 17, 537

 

central banks

35, 389 – 90

competition

507, 514 – 17, 537

international banking

66 – 8

M&As

537

 

 

personal finance sector

514 – 16

regulations

 

237 – 8, 240, 241 – 2, 292,

389 – 90, 515 – 17, 537

structural issues 18, 507, 514 – 17, 537

capital

 

 

 

 

see also gearing risk

 

Basel tiers

182 – 219, 443 – 5, 574

costs

3, 103 – 4, 142 – 6

 

definition

182 – 3

 

flows

xv, 65 – 8, 316 – 17, 409, 415 – 35

RAROC

xv, 103, 142 – 6, 163 – 6, 189,

198, 635 – 8

 

ratios

45 – 6, 53, 110, 182 – 219

[ 686 ]

I N D E X

capital accounts, crises 411

capital adequacy

31, 33, 37, 45, 53, 105,

175

– 6,

182 – 219, 245 – 7, 262 – 4,

309

– 10, 315, 322, 353 – 4, 404 – 5,

443

– 5,

574

see also Basel. . .

CAD-II 193, 205, 273 – 4, 276

CAD-III

262

– 4, 273 – 4, 281 – 3

concepts

181

– 219, 245

– 7

Capital Adequacy Directive

II (CAD-II), EU

193, 205, 273 – 4, 276

Capital Adequacy Directive III (CAD-III), EU 262 – 4, 273 – 4, 281 – 3

capital asset pricing model (CAPM) 103

capital markets, definition 55 – 6

capital risk

 

see also gearing risk

concepts

104, 110

CAPM see capital asset pricing model

caps, concepts

130 – 1

cards

see also automated teller machines

concepts

9 – 15, 91 – 2, 473 – 4

case studies

 

 

 

background

xi – xii, xviii – xix, 358 – 90,

414 – 67, 541 – 652

Bancomer

581 – 94

bank failures

358 – 90, 616 – 31

Bankers Trust

631 – 52

Continental Illinois Bank 363 – 5, 616 – 31

County National Westminster Bank

28 – 30

 

 

Credit´ Lyonnais

595 – 617

crises 414 – 67

 

Deutsche Bank

631 – 2, 645 – 52

Goldman Sachs

45, 542 – 64

Kidder Peabody

564 – 8

M&As

534 – 8

 

Sakura

568 – 81

Sumitomo Mitsui Banking Corporation

568 – 81

 

cash

 

 

 

concepts

9 – 10, 90, 96 – 7

future prospects

90, 96 – 7

statistics

9 – 10, 90

CAT standards

232 – 3

CBOs see collateralised bond obligations CBR see Central Bank of Russia

CCCL see Cheque and Credit Clearing Company Limited

CDOs see collateralised debt obligations

CDs see certificates of deposit

 

 

CDSs see credit default swaps

 

 

Central Bank Law 1995, China

308

 

Central Bank of Russia (CBR)

294 – 305

central banks

xiv, 1, 12, 30 – 9, 66, 87, 90,

 

106 – 7, 175 – 6, 202 – 10, 213, 230 – 2,

 

237 – 8, 242, 245 – 59, 322 – 4, 459 – 67

see also individual central banks

 

concepts

xiv, 1, 12, 30 – 6, 66, 87, 90,

 

106 – 7, 175 – 6, 202 – 10, 213, 237 – 8,

 

459 – 67

 

 

 

 

 

emerging markets

 

33 – 4, 287 – 351, 411,

 

422 – 36, 459 – 67, 581 – 94

 

exchange rates

32, 36

 

 

 

future prospects

87, 90

 

 

 

government-debt placement roles

33 – 6

independence issues

35 – 6

 

 

lenders of last resort

xvii, 33 – 6, 181,

 

237 – 8, 245 – 6, 285 – 6, 365, 459 – 67

monetary-control roles

30 – 6, 175 – 6, 307

netting practices

106 – 7

 

 

price-stability roles

30 – 6, 237 – 8, 282 – 5,

 

459 – 61

 

 

 

 

 

prudential-control roles

32 – 6, 176,

 

229 – 30, 238, 283 – 5

 

 

roles

xiv, 1, 30 – 6, 175 – 6, 202 – 10, 213,

 

230 – 2, 237 – 8, 242, 245 – 6, 322 – 3,

 

459 – 67

 

 

 

 

 

TARGET

12

 

 

 

 

 

certificates of deposit (CDs)

57, 114 – 15,

 

120 – 1, 498 – 9

 

 

 

CHAPS, concepts

9 – 11

 

 

 

Chase Manhattan

535

 

 

 

Cheltenham and Gloucester

 

222

 

Cheque and Credit Clearing Company Limited

 

(CCCL)

9 – 10

 

 

 

cheques, concepts

4 – 5, 9 – 15, 476, 510 – 15

Chicago Board of Options Exchange

42,

 

126 – 8

 

 

 

 

 

Chicago Mercantile Exchange

42, 126 – 8

Chile

338 – 9, 359 – 60, 413

 

 

China

xiv, xvi, 16 – 18, 72, 112, 209,

 

 

288 – 93, 300, 305 – 17, 413, 417, 481

asset management corporations (AMCs) 310 – 11

Central Bank Law

1995 308

commercial banks

307 – 17

crises

413

 

 

financial repression

305 – 6, 314 – 17

foreign banks

311 – 17

growth rates

293, 300 – 1, 314 – 17

inflation rates

314 – 17

interest rates

314 – 17

joint stock banks

310

M&As

311

 

 

market shares

314

performance issues

293, 300 – 1, 314 – 17

reforms

306 – 17

 

segmentation problems 313 – 14

shareholders

310 – 13

statistics

292, 300, 305 – 17, 481

structural issues 288 – 93, 305 – 17

Chinese walls

21, 28 – 30

CHIPS see Clearing House Interbank Payments

System

Citibank

69 – 70, 323

Citicorp Travelers 519

Citigroup

20 – 2, 127, 200, 208, 243 – 51

classical contracts see transactional banking Clearing House Interbank Payments System

(CHIPS) 12 clearing systems

see also payment systems

concepts 9 – 15, 93 – 7, 106 – 7, 127, 278 – 80

‘click and brick’ approach 95

CLOs see collateralised loan obligations CLS Bank 10

clustering factors

bank failures 396 – 7 financial centres 62 – 4

CMOs see collateralised mortgage obligations CNW see County National Westminster Bank Coase, R.H. xiii, 5, 38

Code of Market Conduct rules 23 collars, concepts 130 – 1

collateral, Basel 2 Accord 199 – 200 collateral auctions 297

collateral method, credit risk 156 – 8 collateralised bond obligations (CBOs),

concepts 48 – 51 collateralised debt obligations (CDOs),

concepts 47 – 51

[ 687 ]

I N D E X

collateralised loan obligations (CLOs), concepts 48 – 51, 59

collateralised mortgage obligations (CMOs) 47 – 51

collateralised securities, Islamic banking 325 – 9

collusion xvi, 20, 101, 178, 241 – 3, 247 – 8, 254 – 6

command organisational structures, concepts 5 – 7

commercial banks xi, xiv, 16 – 18, 19 – 22, 24, 41, 155 – 6, 200 – 19, 222 – 59, 372 – 80, 396 – 7, 425 – 36, 481, 490 – 4, 632 – 52

concepts

 

19 – 22, 24, 41, 155 – 6, 222 – 42,

247 – 51, 372 – 80, 396 – 7

 

definition

 

24, 155

 

 

emerging markets

288 – 351

 

US failures

372 – 80, 396 – 7

 

commercial paper

 

 

 

concepts

 

44 – 51, 72, 97, 636

 

statistics

44 – 51

 

 

 

commissions, stockbroker services

5

commodities

108 – 9, 186 – 92

 

commodity swaps, concepts

133 – 8

Companies Acts, UK

29 – 30, 366

 

comparative advantages, concepts

65, 68

compensation, managers

531 – 2

 

‘competing network’ model

11

 

competition

 

xi – xi, xvii – xviii, 3, 5, 101 – 2,

174 – 5, 232 – 6, 247 – 8, 356, 473 – 539

background

473 – 539

 

 

Canada

507, 514 – 17, 537

 

concentrated markets 495 – 520

 

concepts

 

473 – 539

 

 

contestable banking markets 506 – 8,

516 – 17

 

 

 

Cruickshank’s recommendations

11 – 12,

88, 174, 232 – 3

 

 

economies of scale/scope

xiii, xvii – xviii, 3,

26, 62 – 4, 238 – 40, 301, 473 – 539

efficiency issues 473 – 539

 

empirical models

494 – 517

 

financial centres

60 – 4

 

 

generalised linear pricing models

 

xvii – xviii, 508 – 15

 

Herfindahl index

498 – 506

 

M&As

524 – 0, 518 – 19

 

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