This website uses cookies to ensure you have the best experience. Learn more

Activity And Structure Of Financial Intermediaries

2095 words - 8 pages

There are various financial intermediaries within the financial industry. Some intermediaries largely offer depository or savings services while others offer services focusing on insurance and financial securities. Despite the differences in services offered, all of these intermediaries act as middlemen, bridging the gap between savers/lenders and borrowers (Adrian & Shin, 2011; Bodie, Kane, & Marcus, 2011). This paper will discuss the commonalities and differences between the operating activities of securities firms and depository institutions. Additionally, the balance sheet structure of securities firms will be evaluated in comparison to those of other financial intermediaries. Finally, the different major regulatory organizations concerned with daily operations in the securities industry will be analyzed and evaluated to assess their position in the effective running of market operations.

The operating activities of depository institutions and securities firms have some similarities and differences. For one, both depository institutions and securities firms act as intermediaries as they provide retail services to their customers (Saunders & Cornett, 2011). For example, commercial banks mostly make loans for consumers and real estate while savings institutions typically specialize in residential mortgages (Saunders & Cornett, 2011). Similarly, securities firms focus on retail services such as “the purchase, sale, and brokerage of existing securities” (Saunders & Cornett, 2011, p. 104).
In contrast, depository institutions are able to accept deposits from their customers to make various types of loans while securities firms are non-depository institutions that are paid fees to perform services for customers (Saunders & Cornett, 2011). Securities firms participate in investing, market making, trading, cash management, investment banking, mergers and acquisitions, and other service function activities for a fee (Saunders & Cornett, 2011).
Another difference in the operation of depository institutions and securities firms is that of funding. Depository institutions require funding from customer deposits to create loans (Saunders & Cornett, 2011). On the other hand, securities firms produce profits without the requirement of an investment in assets or funding from liabilities on the part of the firm (Saunders & Cornett, 2011).

Balance sheets contain an organization’s assets, liabilities, and equity as of a specific date (ex. May 31, 2010). The balance sheet follows the formula of assets = liabilities + equity, and the formula must balance. Essentially, what a company owns (assets) must be sufficient to satisfy its debts (liabilities) plus what its owners have invested (equity). The type of assets and liabilities differ among firms depending on the type of business operated, financial intermediaries are no exception. Financial intermediaries tend to actively manage their balance sheets as compared to other non-financial...

Find Another Essay On Activity and Structure of Financial Intermediaries

Of Mice and Men: Structure Essay

776 words - 4 pages , but with the irony of their dream dying where it began. The author also explains how sensitive dreams can be and how people, even best friends, have to make the most unthinkable of sacrifices. The irony of this circular structure can be explained in several different aspects. George and Lennie were so focused and dedicated to achieving their dream, that even after all their hard work, the irony was that they never made their dream a reality. That

History and Structure of Policing Essay

1232 words - 5 pages foundation all those years ago but that doesn’t mean the U.S. doesn’t have a long way to go to perfecting its own system of law enforcement. Works Cited • Schmalleger, F. (2013). Policing: History and Structure. Criminal Justice Today An Introduction Text For the 21st Century (12th ed., ). Upper Saddle River, NJ: Pearson Education, Inc. • Bob Johnson's Toughbook Stuff. (n.d.). : How Police Technology Has Changed.... Retrieved , from http

History and Structure of Venice

2549 words - 10 pages History and Structure of Venice Problems with format ?Venice is one of the most fascinating places to travel in Europe.? Its intrigue lies in its unique beginnings, its dominant past, and its remarkable people and their buildings.? Its foundation is unique because of the need for protection that drove the early Venetians to their new home and the location of this new dwelling-place:? ?Rarely in human history has a vigorous and progressive

Working capital structure of Web Solution inc.: Financial analysis, Business Model, Market analysis of Pakistan

3180 words - 13 pages rewarded.Management structure is relatively flat and communication is encouraged.Mutual respect and sharing of knowledge is encouraged.Personnel Plan Personnel Plan 2007 2008 2009 Administration- President Rs.30,000 Rs.30,000 Rs.40,000 Administration- Secretary Rs.30,000 Rs.30,000 Rs.40,000 Administration- Treasurer Rs.36,000 Rs.45,000 Rs.45,000 Dialup Services Manager Rs.45,000 Rs.55,000 Rs.65,000 R & D

Study of Organisation Structure and Design

1290 words - 5 pages ://www.ebscohost.com/ (Accessed: 18 November 2008)Mullins, L. (2007) 'Management and Organisational Behaviour), Prentice Hall. .Pleshko, L. (2007). 'Strategic orientation, organisational structure, and the associated effects on performance', Journal of Financial Services Marketing, 12, 53-64, Business Source Premier, [Online]. Available at: http://www.ebscohost.com/ (Accessed: 19 November 2008)Wang, C, and Ahmed, P. (2003), 'Structure and structural dimensions for knowledge-based organizations' Measuring Business Excellence, Volume: 7, No. 1, pp. 51-62. Emerald Publishing Ltd. [Online]. Available at: http://www.emeraldinsight.com/ (Accessed: 6 November 2008).

The Impact of Organizational Structure and Culture

1010 words - 5 pages The Impact of Organizational Structure and Culture Organizational structure has been set up to facilitate all goal achievements. It is a way to motivate their employees and get them to work together. It also helps its employees to follow the organizations goals, and work together as a team. In order to do this, they need to have an organized structure to be able to run the company smoothly. A main foundation of every organization is to post

An Account of Proteins and Their Structure

1183 words - 5 pages An Account of Proteins and Their Structure It is difficult to describe in a simple sentence the role of proteins. Let's say: When there is something to do, it is a protein that does it. Some examples of proteins * Antibodies: they recognize molecules of invading organisms. * Receptors: part of the cell membrane, they recognize other proteins, or chemicals, and inform the cell. * Enzymes

the structure and culture of the Organisation

1615 words - 7 pages due to past events such as the loss of the former CEO due to illness and the new appointment of Tim cook in 2011. 2.1.3 ORGANIZATIONAL AND POWER STRUCTURE OF APPLE INC The organizational structure of Apple was almost non-existent and focused on placing decision making in the hands of the people in the field. Apple’s corporate structure is unique to the organisation and mystery to most organisations as they are sceptical to understand how it works

Chemistry and the Structure of DNA

690 words - 3 pages Genetics relies on chemistry to explain phenomena related to the field. The structure of DNA relies on chemistry. In fact, when James Watson and Francis Crick discovered the structure of DNA, they did so by building models based on the laws of chemistry. Chemistry also relates heavily to the structure and function of one of the main products of DNA: protein. Chemistry dictates the structure of DNA. DNA is a polymer of monomers called nucleic

The Origin and Structure of our Universe

3913 words - 16 pages , hours and days - at the stage of blue Cepheid variables, and years at the stage of yellow stars. The total cycle of activity of the Sun is 22 years. Even longer periods of pulsations must be characteristic of red stars. Deceleration of stars rotation about their axes occurs in the same direction according to the law of conservation of angular momentum (from very fast of young pulsars to very slow of old red stars). It should be noted here

Structure of the cell and bio molecules

751 words - 4 pages The cell, what is a cell means and what is the structure of it. Everyone knows that it’s the smallest particle in any living organism and it’s responsible for anything that happens in our bodies. As there’s no one know what it functions, what is the structure of the cell and what it is consisted from and what does every part in it functions. So, first of all the theory of a cell is that all organisms are formed from cells which is

Similar Essays

The Major Risks Of Financial Intermediaries

2350 words - 9 pages The Major Risks of Financial Intermediaries A financial intermediary is an establishment or an institution which acts as a third party between investors and firms in trying to obtain funding. A general explanation would be the instance of a saver who has extra money and a borrower who needs this extra capital. A typical example of a financial intermediary is a bank, but there are more such as life insurance companies

Linear And Non Linear Quantitative Structure – Activity Relationship Models On Indole Substitution Patterns As Inhibitors Of Hiv 1 Attachment

2221 words - 9 pages This study was performed to develop a quantitative structure–activity relationship (QSAR) model of the biological activity of indole glyoxamide derivatives as an inhibitor of the interaction between human immunodeficiency virus (HIV) glycoprotein gp120 and host cell CD4 receptors. In present study, forty different compounds were selected as a sample set. Combinations of multiple linear regressions (MLR), genetic algorithms (GA) and artificial

The Effects And Causes Of Volcanic Activity

1925 words - 8 pages interactions between the atmosphere and various other geologic, chemical, biological, and geographic factors within the Earth system.” With all of the debris that enters the atmosphere from eruptions, volcanoes can make an impact on climate change. Volcanic activity can cause global cooling, but some sources say that it has the potential to impact global warming as well, due to the amount of carbon dioxide (CO2) that enters the atmosphere. When

Benefits Of Nature And Outdoor Activity

861 words - 4 pages nature, especially in the last few decades. We now spend most of our time indoors, doing homework or watching television; not experiencing nature. The great outdoors have so many unrealized benefits, but we don’t take advantage of them or experience them as much as we should. In general, physical activity is known to reduce the risk of many diseases and help lengthen your life. Just 2 hours and 30 minutes of physical activity a week can help to