The us investment bank model and the financial crisis 美國的投資銀行模式和金融危機

Abstract摘要

最開始的時候，投資銀行出現在19世紀歐洲地區，然后在20世紀初出現在美洲地區，在短短的一百年多的時間內，投資銀行已經成為金融領域的最閃耀的新星。尤其是，在20世紀80年代左右，金融管制較為寬松，投資組合不斷的創新，借由競爭，其業務構成和資本結構都發生了十分巨大的變化，這里面的薪酬激勵模式也受到了很大的爭議。這些因素都給投行帶來了十分巨大的發展，當然，這也使其成為這次次貸危機的導火索。實際上來說，次貸危機不僅僅是人們貪婪的欲望所致，更主要的也反應出美國投資銀行所存在的巨大缺陷，所以我們應該先了解投資銀行與傳統銀行這兩種不同的模式，然后再去看其產生的影響，最終總結經驗和教訓。
 

Investment Banks began in Europe in the 19th century, the beginning of the 20th century in the United States. Within a century, the investment bank is the financial sector's brightest star. Especially in the 1980 s with the relaxation of the financial regulation, investment Banks in the competition to innovate unceasingly, the business structure and capital structure are also great changes have taken place in the process of innovation, its salary incentive mode is controversial. These factors to investment Banks has brought rapid growth over the past few years, but also become this in the subprime crisis. In essence, the subprime crisis is not just the result of the investment bankers' greed, deeper reflects the pattern of defect and crisis, the us investment bank. First let's go to know the two modes of traditional investment banking, then go to the American investment Banks in pursuit of high yield and transformation, the influence of the final summing up the experience of this pattern. 

 

Background背景

Since 2006 in the United States gradually revealed in the subprime mortgage crisis, because of the subprime mortgage lenders bankruptcy, investment funds were forced to close, stock market volatility, together with the U.S. financial system is to loose monetary policy, excessive financial innovation, inadequate financial regulation and support the growth of credit consumption patterns, and eventually sent by the mortgage market crisis spread to the entire American economy market. The worst crisis for the 79 - year - old American investment banking industry in a short time. 
 

Let's go to understand the financial crisis and the relations between the United States investment banking model, why can hit American investment banking, as well as the financial crisis brings the us investment bank, the experiences and lessons of how to reduce the damage. 

 

Until today in development of western investment Banks has experienced a history of two hundred years or so, the investment Banks in the process of its development has formed their own different characteristics, but on a global scale, generally can be divided into two modes. #p#分頁標題#e#

 

1, represented by continental European countries the universal banking model: 

Universal Banks from Germany, it is a type of bank, it not only run the bank business, but also operate securities, insurance, financial derivatives, and other emerging financial business, some still can hold the equity of non-financial companies, commercial Banks and investment banking are not isolated, all Banks can comprehensively various financial business, can be engaged in the deposit and lending, securities trading, leasing, guarantee, etc and investment Banks, commercial Banks and even the insurance agents can also be engaged in by the bank. Generalized universal Banks is commercial Banks and investment Banks and insurance companies to add non-financial corporate shareholders. People often say that universal Banks mainly refers to the Banks to engage in all financial business. The essential characteristics of the universal bank is only one thing: to use an integrated service platform to provide efficient, one-stop, comprehensive financial services. 
 

In the increasingly fierce market competition, the universal bank has the following obvious advantages: 

(1) universal Banks can quickly adapt to the market. The diversity of the universal bank management for Banks to develop financial products and exploit the business market offers huge potential development space, thus greatly enhance the adaptability to changes in financial markets, commercial Banks and the ability to resist risks, to timely adjust itself according to changes in the financial markets of operation and management activities. 

(2) universal Banks as "financial department store", provide a comprehensive range of financial services, so as to reduce the service cost. It is not only convenient for the customer, and it reduces the cost of information gathering and financial transaction costs, not only make a single bank profitability improved, increases the efficiency of the whole economic system. 
 

(3) a stable and high quality basic customer base is the key to the universal bank. On the one hand, the universal banking model is helpful to form the interests balance relationship between the fact. Because, on the other hand, can carry out investment banking business, hold or all kinds of securities underwriting business, even the exercise of shareholders' rights as shareholders agency (e.g., Germany, Japan's Banks), Banks and companies formed a close lasting relationship between clients. 
 

At the same time, however, the universal bank also has some disadvantages: 

(1) under the universal banking model of commercial bank in pursuit of high profits and involved in investment banking, is easy to apply the customer's savings to securities investment, taking on too much risk, but the depositor does not know that commercial Banks are taking advantage of this risk, and thus does not require commercial Banks to pay additional interest, so commercial Banks take on the part of the risk for depositors, is not conducive to protect the interests of depositors. #p#分頁標題#e#

(2) under the universal banking, commercial Banks and industrial and commercial enterprises with close contact, can more easily access to the outside world is hard to know inside information, and the first to reflect before this information may affect the securities market, resulting in insider trading, it is unfair for the broad masses of investors. 

(3) the universal banking model to human flow will result in the securities market. Commercial Banks with big money, but the commercial bank to in order to meet customer business's need for cash withdrawal and itself, pay special attention to liquidity, so it can only short-term investments and into when out in the stock market, it will induce the stock market boom collapsed, thus affecting the stability of financial markets, is not conducive to the development of the securities market, and damage the interests of small and medium-sized investors. 

In general, the model due to less subject to the conditions of separated operation, thus has strong competitiveness, from the current global financial industry development trends, this model will be in the leading position. 

 

 

The us investment bank model and the financial crisis 美國的投資銀行模式和金融危機

 

Investment Banks to innovate constantly in competition, the business structure and capital structure are also great changes have taken place in the process of innovation, its salary incentive mode is controversial. These factors to investment Banks has brought rapid growth over the past few years, but also become this in the subprime crisis. 

1, early American investment banking model and its evolution

In different countries and regions, investment Banks have different appellation: in the United States is referred to as "investment banking", in the UK is referred to as "merchant bank", in other countries and regions are referred to as "securities firms". It should be pointed out that, although all known as "bank", the commercial Banks and investment Banks are actually two different types of financial institutions. 
 

In the past century, the U.S. banking sector has experienced from the mixed management to the processes of the separate operation to mixed operation. In 1929, the U.S. stock market crash before the depression, the United States banking mixed management. In this process, the rapid development of industrialization, the public companies and securities market has given rise to a number of oligarch type universal Banks; Its typical representative is Morgan consortium. 
 

1929 stock market crash triggered the economic crisis, commercial Banks should bear charges for the collapse, people debate so far. But one thing is certain, the commercial Banks to participate in speculation played their part. Soon after the crisis, the United States government has issued a great influence on the financial sector the glass - steger, act. The act defined: bank and its subsidiary separation of securities; Can do government bonds, commercial Banks can't do with securities business of securities of the company; Commercial and investment banking business must be strictly separated; Banks are prohibited from employees or members of the board of directors is arranged in the securities company. The bill for the influence of the commercial Banks and investment Banks are huge, it directly led to the decentralized management of commercial Banks and investment Banks. When JP Morgan company dominate the U.S. financial sector will also have to engage in investment banking department, established the Morgan Stanley. #p#分頁標題#e#
 

In the 90 s, in order to better meet customer demand for one-stop financial services, so as to further enhance the global competitiveness of U.S. financial institutions, commercial Banks also allows universal banking business, the United States banking goes back to the mixed management pattern; Its typical representative is JP Morgan. According to related statistics, the U.S. financial sector profits of listed companies profit share rose to 40% from 5% 20 years ago, the financial expansion significantly greater than the service of the real economy. Advocate of free market economy, the relaxation of the regulation, let more and more commercial Banks to join the feast of derivatives. Compared with Europe universal Banks outside the United States, the United States investment banking formed in the course of the development process of huge profits in the derivatives market. Commercial Banks in investment banking, make high-risk infiltrate into commercial Banks, investment Banks which is one of the reasons for the subprime mortgage crisis can't end. 
 

Investment Banks, with its strong profitability and the focus of the world's attention. Company mergers and acquisitions, for example. Since the 1880 s, America experienced at least four times wave company mergers and acquisitions. In a recent wave of acquisitions, hold a pre-tender estimate of billions and billions, some even more than billions of dollars. This provides a considerable source of income for investment Banks. 
 

Investment Banks strong profitability comes from its unique business model in the first place. Compared with the commercial Banks, first of all, the investment bank is given priority to with wholesale business. In addition to the brokerage, investment banking basically belongs to the wholesale business. Five investment Banks in the United States, only the merrill lynch also maintains a large brokerage business department. Second, the investment bank is given priority to with knowledge intensive business. In essence, investment Banks belong to financial consulting. Financial consulting is not only an independent investment bank business, and is the basis of other investment banking business intelligence. For example, to assist FaHangTi issue securities, the first thing you need to help design their securities, this will require a comprehensive, in-depth research and analysis. In fact, research and analysis ability, rather than money, marketing strength, is the core competence of investment bank. Money, sales strength, of course, also cannot be ignored. For example, to assist the company in mergers and acquisitions, but also need to help them make the necessary market operations. This requires sufficient funds, sales strength. However, both in securities trading, securities underwriting, and company mergers and acquisitions, cannot leave the commands from a investment banker. For beefing up of an investment banker, financing, marketing and other market operation is not a problem. #p#分頁標題#e#
 

Fundamentally, the investment bank, strong profitability comes from its unique business culture. In the capital market, return is proportional to the risk. In general, commercial Banks to a more prudent, more attention to the safety and liquidity of funds. Investment Banks also attaches great importance to the risk management and internal control of course, but compared with commercial Banks, investment Banks have more "greedy", in order to achieve higher yields at higher risk. Adventure and innovation hand; Typically such as margin and innovation of financial derivatives. A common feature of the innovation is to leverage; This is "asymmetric" popular. Magnifies the gains, they multiplied exponentially amplifying the risk at the same time. As the saying goes, "to me, and responsible. In the subprime crisis, five big investment Banks are in trouble, there are a variety of reasons, for its part, "gambling" is too large is its direct cause. 

 

2, investment Banks in the financial crisis plays a dual role: 

In the subprime crisis, bear stearns, Wall Street investment bank such as lehman brothers, merrill lynch finally not, its ultimate problem is the investment bank's dual role. On the one hand, they are the referee, with its study to hot money money sloshing around global trends; On the other hand, they are created and players, and participate in a variety of high risk and high return very complicated financial products business. It also make them become direct manufacturer of this crisis, became the target. 
 

The direct cause of the crisis is America's subprime mortgage crisis. Since 6 years, the housing market began to turn around, house prices began to fall, leading to subprime mortgage defaults rose sharply, subprime mortgages to be issued on the basis of the subordinated debt yields sharply reduced or even losses, before a large number of institutions holding these bonds, such as many subprime mortgage institutions, investment Banks, hedge funds and other breakdowns or was forced to shut down, at the same time, the stock market volatility, it caused the world's major financial market liquidity shortage crisis. 
 

In the process, the Wall Street investment Banks for the transfer of the subprime crisis, expand and spread to the world has made the very big "contribution". Due to low rates of long-standing U.S. before too loose monetary policy, leading to excess liquidity, emerged A large number of real estate bubble, mortgage in short supply, Banks and mortgage companies so brazen, began to people with weak credit issued A large number of "alt-a" and the subprime mortgage loan. 
 

At the end of 2006, all five years of the American real estate finally fell heavily from their peak, the fund chain is finally began to fracture. Because of falling house prices, after the time limit to the prime lending rate, first the ordinary people unable to repay the loan, then the subprime mortgage bank collapse and the subprime mortgage companies, hedge fund losses, which in turn bring trouble AIG insurance companies and Banks to hedge funds loans, citigroup, Morgan has been huge loss report. At the same time, the hedge fund's big investment Banks have also loss, then the stock market crash, widespread losing money, unable to pay mortgages people continue to increase, the us subprime crisis. #p#分頁標題#e#
 

In 2008, several major Wall Street investment bank failures and the takeover, only two big investment Banks Goldman sachs and Morgan Stanley transition into a bank holding company. They have been subordinated bonds issued to become worthless. Those that hold a lot of Wall Street investment bank to sell subprime international investment institutions have also in crisis, lead to the global liquidity crunch, causing a global panic. Followed the serious global financial crisis. 

 

3, the shortcoming of the dominant American investment banking model and crisis 

Investment Banks began in Europe in the 19th century, the beginning of the 20th century in the United States. Within a century, the investment bank is the financial sector's brightest star. Especially in the 1980 s with the relaxation of the financial regulation, investment Banks in the competition to innovate unceasingly, the business structure and capital structure are also great changes have taken place in the process of innovation, its salary incentive mode is controversial. These factors to investment Banks has brought rapid growth over the past few years, but also become a prelude to the financial crisis. 

 

 

To the influence of the shareholding system transformation of partnership 

In the United States, the investment Banks in the vast majority of the partnership form of business organization. Partnership because of its ownership and management together, can fully mobilize the enthusiasm of managers, at the same time the stability and continuity of investment banking business, therefore was considered the most ideal organization form, an investment bank. Keep us investment bank partnership for over 100 years of glorious history, until in 1999, Goldman sachs listed partnerships. In today's the securities industry, partnership investment Banks have almost completely replaced by joint-stock listed company. 
 

From the practice, the us investment bank joint stock system and listing by partnership instead, indeed brought great benefits: to raise a lot of capital, enriched the capital; Abundant capital strength, losing a large number of talents, human capital advantages highlighted; Make enterprise value steep stock, stock options implemented and realized the channel, incentives to innovation and obviously; Disclosure of information to increase the transparency of the investment Banks, the market external constraint mechanism and so on. When an investment Banks abandoning partnership, listed separately, may lead to competitive advantage for himself. Copycats and once the whole industry, the same structure, comparative advantage will be lost, and considerable side effects: (a) is a change or loss of the enterprise culture. Into a joint-stock enterprises, the diversification of shares and the diversification of staff makes it unique enterprise culture lost; (b) is the company's core difference and fuzzy. After the investment Banks listed, these companies have instinctively to comprehensive group development. This further down the differences in investment Banks, highlighted the compete with each other; (c) is the company's incentive constraint mechanism. After investment bank listed, make money first, distribution system implementation according to generate a profit. Culture connotation is gradually along with the company, employees in the era of a partnership between the invisible internal responsibility restraint is also gone. Is the so-called strong material incentives, the weak moral constraints. The many investment Banks in 2002 in the horizon are enron credibility crisis. #p#分頁標題#e#

 

Mediation income mainly to the investment income is given priority to shift 

In recent years, investment Banks have started from the traditional service primarily, take an examination of a commission on the management mode of business model to give priority to with money transactions, a large number of involved in derivatives trading, hedge funds, the higher risk areas, many investment Banks has disguised as a hedge fund, in the process of risk control and failing to keep up with, its are struggling in the financial storm. At the same time, the crisis has exposed the serious shortage of investment Banks' capital. 
 

Investment bank's business mainly has the following several: traditional investment banking, this is one of the traditional investment banking business, mainly including underwriting, financial advisory, corporate lending, etc.; Proprietary "refers to a company as a delegate for the clients to trade financial assets and revenues and using their own money trading revenues; Asset management fee, which is charged to the institutions or individuals for asset management, account management and services. Nearly 20 years, great changes have taken place, the us investment bank business, their income is also rapid growth, the growth actually benefit from their income structure changes. 
 

20 years from 1975 to 1996, the investment bank's traditional business income from investment Banks underwriting and brokerage business income mainly to give priority to with other business income. Underwriting fees and commissions in 1975 accounted for the proportion of total revenue of 13.3% and 49.9% respectively, other income accounted for 9.9%; By 1996, the underwriting income and fee income accounted for the proportion of total revenue of 9% and 15.4% respectively, while the other income rose to 47.6%; By 2007, the underwriting income and fee income accounted for the proportion of total revenue of 5.59% and 11.5% respectively, other income up to 63.6%. Can see from the data, with the development of financial innovation, the investment bank's business but also great changes have taken place 
 

In investment banking business, its business income is the fastest increase, the derivative transactions become the source of investment Banks in trouble in the future or even closing their doors. Since the 1970 s, with the continuous development of financial products and technology, every day in the stock market in the financial derivatives, different levels of risk and return. Investment Banks in a large number of financial derivatives transactions, earn high profits. 
 

In order to pursue high profits, investment Banks also use financial leverage. Leverage is the ratio of total assets and net assets, the higher the ratio, the greater the risk. High leverage effect on the investment bank is a two-way street, it can enlarge the investment Banks' profits, also can enlarge investment banking losses; The slight impairment of the assets or business of small losses are likely to cause serious impact to weak capital, it into disrepute. #p#分頁標題#e#
 

High leverage ratio rising makes the management risk of the investment bank, once investment problems will make its loss is far beyond the capital. Lehman brothers declared bankruptcy protection, its liabilities as high as $613 billion, debt-equity ratio is 6130, 260. In addition, the investment bank, a lack of a stable source of funds as commercial Banks, the high leverage makes the investment Banks have to rely too much on short-term funding markets. Investment Banks usually trade through the monetary market to fill the funding gap, and once their financial situation deteriorates, rating companies will reduce their ratings, make its financing costs rise, this is likely to cause maintain liquidity through financing, investment bank bear stearns was so run on and fall. Bear stearns, the 2007 fiscal year short-term loan of $11.6 billion, sold out but has yet to repurchase stock value is as high as $102.4 billion, at a time when the rights and interests of bear stearns value but also $11.8 billion. Compared with the long-term debt financing, short-term debt financing costs are lower, and as long as keep stable operation can be continuous rolling, but in fact the risk of short-term debt financing is not low, once the deterioration of operating conditions, huge short-term debt can drive investment bank bankruptcy on wall, bear stearns and lehman is obvious example. 

 

The influence of executive compensation mode 

Us investment Banks pay structure generally consists of basic salary, annual bonus, mid-term and long-term incentive compensation and various benefits four components. Among them, the basic pay for regular payments, usually for a monthly payment (also have weekly pay), only involves the employment risk, risk degree is very low. Annual bonus is usually paid annually (also some quarterly or half year one-time payments), generally in the form of cash payment, annual bonus associated with the performance of companies and individuals, reflect the staff's efforts and achievements. Medium and long term incentive pay including stock options, stock appreciation rights, restricted stock, virtual shares, performance shares (cash), medium and long term compensation incentive plan time span ranging from 3 years to 10 years. 
 

Investment bank employee bonus is generally the basic pay for several times. Most investment bank employee bonuses generally in the form of cash payment, a smaller part of bonuses in shares and options. Cash component generally adopt measures to cap of unlimited, staff to create the higher net profit, the higher the bonus you will get; And bonuses are restricted to zero of the bottom line, even some investment Banks also signed "guaranteed bonuses" agreement with employees, even if the employee loss, Banks must also pay the bonus. 
 

For the investment bank's senior managers, in addition to the salary, and an enviable and additional benefit plans and other benefits. #p#分頁標題#e#

Investment Banks pay design is so "uncapped, have guaranteed", this mechanism provides an obvious incentive, make investment decision makers and employees the courage to risk, also don't have to take full responsibility in terms of money. Because any losses are completely by the company and ultimately borne by shareholders, rather than by the staff responsible for. Even staff errors or loss, and the basic salary can reach, the worst situation is to resign. So the staff has a strong incentive to pursue high profit. Over the past few years of a bull market and staff is chasing the drawbacks of high-risk high-yield concealed, people were carried away, year-end bonuses and dividends forgot to unleash the potential risk of these risky deal. 
 

The current compensation mechanism for the investment Banks not only provides the massive risk-taking incentives, but also can't cut the overall bonuses to quickly reduce cost, reduced it by quickly cut costs to absorb capital losses and writedowns of ability, it is enough to become a potential threat to financial stability. 

 

 

Lessons learned 學習到的東西

Since 2006 in the United States gradually revealed in the subprime mortgage crisis, because of the subprime mortgage lenders bankruptcy, investment funds were forced to close, stock market volatility, together with the U.S. financial system is to loose monetary policy, excessive financial innovation, inadequate financial regulation and support the growth of credit consumption patterns, and eventually by the mortgage market crisis spread to the entire American economy market. The worst crisis for the 79 - year - old American investment banking industry in a short time. We will learn lessons from this crisis, don't repeat it again. 
 

1, the risks of excessive pay careful attention to financial innovation. 

Financial innovation is a "double-edged sword", it can play the function of the active transactions, transfer and spread risk, also can use leverage financial flutter. Financial innovation is the source of power to promote the development of the financial sector, no innovation, no efficiency. Under the condition of market economy, innovation is the basic power of economic development. So, we should grasp the relationship between the balance between financial innovation and risk control, on the basis of financial innovation. If financial innovation knowledge just in pursuit of profits, the consequences will be no one to pay attention to the true value of these financial products, it is bound to promote short-term speculative QuLiHua, caused the financial crisis. Like the emergence of MBS and CDS, because of the need for financing is ultimately unable to cope with the market liquidity shortage brought by the crisis. So pay attention to financial innovation could lead to financial risk and liquidity risk of financial efficiency and financial resources to the effective configuration as the primary purpose of financial innovation, financial innovation will be placed in manageable, so that it is really pushing effect to the financial development. #p#分頁標題#e#
 

2, to strengthen the supervision and restriction financial instruments. 

In response to the financial crisis, the government must starting from the actual situation of their own, can not be restricted by the existing rules, it was time to change the rules will be change rule, it was time to inject liquidity should be injected. It is very important to grasp the timing of the intervention, decisive intervention. Crisis, the protection of some financial institutions are necessary, must ensure that the financial institutions to implement the necessary financial function. Financial instruments and its derivatives can only transfer risk, risk cover, but can't eliminate the risk. In risky investment, with the condition of liberalization, regulation is always lagging behind the market, and the government and social supervision of financial institutions ability is limited, so from the beginning to monitor the use of financial instruments, namely regulation, limit of the capital market liberalization and securitisation. In financial products trading process regulation can guarantee trading transparency and contribute to making at the same time in the investment bank in the risk transfer will be associated with the risk of information to investors, weakening market failure caused by information asymmetry. And the behavior of a departure from the principle of credit, a rating agency shall be subject to the conditions of financial regulation, to ensure the reasonable and fair evaluation of financial products. 
 

3, the investment structure and moderate diversified business. 

In the crisis that lehman brothers, because do not like the commercial bank deposits as a stable source of funds, under the drive of speculation, put most of the money in the short-term money market financing, the specific performance is the mortgage bonds, the crisis on to the real estate market. Caused by a lack of their own capital, excessive borrowing capital, capital adequacy ratio is low and the pursuit of high leverage, so the subprime mortgage crisis in the market and a liquidity crisis, no gaps liquidity sufficient capital, losses are exponentially increases. Therefore, for a large bank business, how far the investment structure is a must, should be a wide range of business, rather than just for the sake of short-term profit gain is limited to the benefit in the short term sexual high project invested a lot of money. 

The lessons of the subprime crisis also is multifaceted. From the point of view of risk management, it is necessary to further strengthen the financial enterprise internal control and external supervision of the government. In an uncertain business world, only do a good job in risk management, in the changeable market competition. To specialize in risk management of financial firms, in particular. But don't overdo. Both do not isolate and don't be afraid to innovation. Under the condition of market economy, innovation (including technology innovation and institution innovation) is the basic power of economic development. For emerging and transitional economy like China. The right attitude should be: maintaining stability. #p#分頁標題#e#

 

Three years ago, no one believes has been seen as the global financial indicator of Wall Street to such is tottering. However, the subprime crisis thoroughly broken Wall Street myth. Now it seems that the financial plague have invaded the world's most immune to the Wall Street financial body's bone marrow. The United States is the most serious since 1929 financial suicide. The crisis is not last time Wall Street financial crisis. Wall Street this crisis unceasingly, has happened many times in history, this just happened again. The development history of Wall Street, large and small crisis seen hundreds of times. In a sense, the development history of financial markets is a process of constant crisis, constantly amended, but the crisis is the latest time, and a lot of people think that to the wide range and great influence, is unprecedented. In financial market transmission mechanism, the plague spread rapidly around the world. As Wall Street triggered by the subprime mortgage crisis spread to global financial markets, Wall Street greed and fraud laid bare in front of the world, Wall Street has become the source of a lot of man's sin. 

Reference文獻參考

Hoggson, N. F. (1926) Banking Through the Ages, New York, Dodd, Mead & CompaGoldthwaite, R. A. (1995) Banks, Places and Entrepreneurs in Renaissance Florence, Aldershot, Hampshire, Great Britain, Variorum
Macesich, George (30 June 2000). "Central Banking: The Early Years: Other Early Banks". Issues in Money and Banking. Westport, Connecticut: Praeger Publishers (Greenwood Publishing Group). p. 42. doi:10.1336/0275967778. ISBN 978-0-275-96777-2. Retrieved 2009-03-12. "The first state deposit bank was the Bank of St. George in Genoa, which was established in 1407."
Thus by the 19th century we find “[i]n ordinary cases of deposits of money with banking corporations, or bankers, the transaction amounts to a mere loan or mutuum, and the bank is to restore, not the same money, but an equivalent sum, whenever it is demanded.” Joseph Story, Commentaries on the Law of Bailments (1832, p. 66) and “Money, when paid into a bank, ceases altogether to be the money of the principal (see Parker v. Marchant, 1 Phillips 360); it is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it.” Lord Chancellor Cottenham, Foley v Hill (1848) 2 HLC 28.
Richards. The usual denomination was 50 or 100 pounds, so these notes were not an everyday currency for the common people
 Richards, p. 40  "A History of British Banknotes". britishnotes.co.uk.  "A short history of overdrafts". eccount money.
Boland, Vincent (2009-06-12). "Modern dilemma for world’s oldest bank". Financial Times. Retrieved 23 February 2010.#p#分頁標題#e#
The world's second oldest bank—and its plans for the future, thegatewayonline.com
de Albuquerque, Martim (1855). Notes and Queries. London: George Bell. p. 431.
United Dominions Trust Ltd v Kirkwood, 1966, English Court of Appeal, 2 QB 431
(Banking Ordinance, Section 2, Interpretation, Hong Kong) Note that in this case the definition is extended to include accepting any deposits repayable in less than 3 months, companies that accept deposits of greater than HK$100 000 for periods of greater than 3 months are regulated as deposit taking companies rather than as banks in Hong Kong.
e.g. Tyree's Banking Law in New Zealand, A L Tyree, LexisNexis 2003, page 70.
Bank of England statistics and the book "Where does money come from?", page 47, by the New Economics Foundation."How Banks Make Money". The Street. Retrieved 2011-09-08.
Bolt, Wilko; Leo de Haan; Marco Hoeberichts; Maarten van Oordt; Job Swank (2012). "Bank Profitability during Recessions". Journal of Banking & Finance 36 (9): 2552–2564. doi:10.1016/j.jbankfin.2012.05.011.
    ^ Jump up to: a b Banking 2010 PDF (638 KB) charts 7–8, pages 3–4. TheCityUK.
TNAU. "LAND DEVELOPMENT BANK". TNAU Agritech Portal. Retrieved 8 January 2014.
Scott Besley and Eugene F. Brigham, Principles of Finance, 4th ed. (Mason, OH: South-Western Cengage Learning, 2009), 125. This popular university textbook explains: "Generally speaking, U.S. financial institutions have been much more heavily regulated and faced greater limitations ... than have their foreign counterparts."
    ^ Jump up to: a b Mishler, Lon; Cole, Robert E. (1995). Consumer and business credit management. Homewood: Irwin. pp. 128–129. ISBN 0-256-13948-2.
Statistics Department (2001). "Source Data for Monetary and Financial Statistics". Monetary and Financial Statistics: Compilation Guide. Washington D.C.: International Monetary Fund. p. 24. ISBN 978-1-58906-584-0. Retrieved 2009-03-14.
    "For Banks, Wads of Cash and Loads of Trouble" article by Eric Lipton and Andrew Martin in The New York Times July 3, 2009