TAILIEUCHUNG - Banking - Introduction (Second edition): Part 2

(BQ) Continued part 1, part 2 of the document Banking - Introduction (Second edition) has contents: Banking in europe, banking in Japan, banking in emerging markets, banks and markets, mergers and acquisitions, bank competition and financial stability. Invite you to refer. | Comparative banking markets 13 Banking in the UK 399 14 Banking in Europe 441 15 Banking in the US 491 16 Banking in Japan 527 17 Banking in emerging markets 554 Learning objectives To understand the main structural features of the UK banking market To identify the main trends in the recent performance of UK banks To discuss the implications of increased concentration on competition in the UK banking sector To understand how the financial crisis has impacted on UK banks To understand the characteristics of the UK payment system To describe the regulatory changes that have impacted the UK banking sector pre- and post-financial crisis Introduction UK banking was badly hit by the 2007 global financial crisis. What was once a profitable innovative and dynamic industry virtually collapsed exposing a series of weaknesses that increased the severity of the crisis and its impact on the real economy. The Turner Review 2009 identified five key issues that played a crucial role in the downfall of UK banking. A first reason is the rapid growth of the financial sector particularly in terms of the relative size of wholesale financial services within the overall economy. The increasing size of the financial sector went hand in hand with an increase in leverage asset to capital and in the complexity of the financial system for example the growth in securitised credit and shadow banking these are discussed in detail in Chapter 18 . In addition the growing scale of banking particularly of investment banking activities was accompanied by changing forms of maturity transformation which led to an underestimation of risk compounded by the reliance on sophisticated risk management techniques such as VaR . It is a commonly held opinion that the very complexity of the mathematical models used to assess and manage risk made it difficult for bank management to fully understand the risks banks were taking. Finally the use of such models to guide management decisions

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