Question

Discuss the differences between commercial Bank and Savings institution based on the following aspects:

1) Key balance sheet characteristics;

2) Industry performance; (7.5 marks)

3) Regulation burden. (7.5 marks)

Answer 1

1) Key balance sheet characteristics are as follows:

• An intermediate report
• An unassigned cost statement
• Statement of duration
• A place of statement
• Correlative statement

Discuss the differences between commercial Bank and Savings institution :

The prime diffrence between commercial bank & savings institute is the way of regulation ,which adjudge offering of banking products.

The bank seems interchangable today given that there are commercial banks & saving institute.which has known as savings & loans.

Both commercial & saving institute provided loan for the customer like as mortgage,car,credit card,personal loan.

Also both organisation make the loans to business purposes & govt.bodies.

However the major difference commercial banks is also known as national banks,tend to looking into business customers.because these type custmers are finding loans for construction ,aquisition,expansion plan etc.

Saving institute mainly focus on mortgages or other type of cosumer loans like purchase TV,AC ,Mobile all consumer products.

Regulation Burden :

Regulation for Savings institutes : savings institutes commercial banks both are regulated by federal agencies.

The office of thrift supervison is the primary regulatory for savings institute,the prime job is to ensure the financial soundness of Saving institutes.

Regulation of Commercial Banks :

A federally chartered commercial bank must belong to the federal reserve system,placing it under the regulatory & supervision of the federal reserve. However,all commercial banks are FDIC insured.