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© South-Western Publishing Slide 11
SPECIALIZED BANK SERVICES
9.19.1 International Banking9.29.2 Insurance and Brokerage9.39.3 Cash Management9.49.4 Trusts
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© South-Western Publishing Slide 22
Lesson 9.1
INTERNATIONAL BANKING
Identify three types of financial institutions engaged in international bankingDescribe international services offered by banks
GOALSGOALS
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STRUCTURE OF INTERNATIONAL SERVICESSTRUCTURE OF INTERNATIONAL SERVICESSTRUCTURE OF INTERNATIONAL SERVICESSTRUCTURE OF INTERNATIONAL SERVICES
Foreign banksU.S.-based international bankingOther types of international operationsSpecial considerations
Financial riskCurrency riskCountry risk
© South-Western Publishing Slide 44
INTERNATIONAL SERVICESINTERNATIONAL SERVICESINTERNATIONAL SERVICESINTERNATIONAL SERVICES
Trade financing Letters of creditDrafts and wiresInternational collectionsForeign currency exchange
Trade consultingU.S. export-import (Ex-Im) bankOverseas private investment corporation (OPIC)Small business administration (SBA)
© South-Western Publishing Slide 55
Lesson 9.2
INSURANCE AND BROKERAGE
Explain the effects of the Gramm-Leach-Bliley Act of 1999List typical insurance and brokerage products available from financial institutions
GOALSGOALS
© South-Western Publishing Slide 66
A NEW ERAA NEW ERAA NEW ERAA NEW ERA
The old world: Glass-Steagall ActThe new world: Gramm-Leach-Bliley ACT
(GLBA)Limits and regulation
© South-Western Publishing Slide 77
PERSONAL INSURANCE PRODUCTSPERSONAL INSURANCE PRODUCTSPERSONAL INSURANCE PRODUCTSPERSONAL INSURANCE PRODUCTS
Auto insuranceCredit insuranceDisability insuranceLife insuranceHealth insuranceHomeowner’s insuranceMortgage disability insuranceTitle insurance
© South-Western Publishing Slide 88
BUSINESS INSURANCEBUSINESS INSURANCEBUSINESS INSURANCEBUSINESS INSURANCE
Commercial liabilityShort-term disabilityLong-term disabilityHealth insuranceOfficers’ liabilityPropertyWorkers’ compensation
© South-Western Publishing Slide 99
BROKERAGE SERVICESBROKERAGE SERVICESBROKERAGE SERVICESBROKERAGE SERVICES
Brokerage refers to bringing together parties interested in making a transaction, such as buying and selling shares of stock.
A broker charges a fee to execute the transaction.
Banks now offer full investment services.
© South-Western Publishing Slide 1010
Lesson 9.3
CASH MANAGEMENT
Explain why banks are in a good position to offer cash management servicesList several cash management services banks perform for businesses
GOALSGOALS
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SYSTEM IN PLACE FOR CASH MANAGEMENTSYSTEM IN PLACE FOR CASH MANAGEMENTSYSTEM IN PLACE FOR CASH MANAGEMENTSYSTEM IN PLACE FOR CASH MANAGEMENT
Every business needs to disburse and collect cash to complete business transactions.
Banks are in a good position to provide cash management services to businesses for a number of reasons.ExperienceBusiness knowledgeTechnology Industry expertise
© South-Western Publishing Slide 1212
CASH MANAGEMENTCASH MANAGEMENTCASH MANAGEMENTCASH MANAGEMENT
Accounting servicesBank collection servicesInformation servicesCredit card servicesCapital services
© South-Western Publishing Slide 1313
ACCOUNTING SERVICESACCOUNTING SERVICESACCOUNTING SERVICESACCOUNTING SERVICES
PayrollAccounts payableAccounts receivable
© South-Western Publishing Slide 1414
BANK COLLECTION SERVICESBANK COLLECTION SERVICESBANK COLLECTION SERVICESBANK COLLECTION SERVICES
Deposit serviceLockbox serviceZero-balance accountsAutomated Clearing House (ACH) Network
© South-Western Publishing Slide 1515
INFORMATION SERVICESINFORMATION SERVICESINFORMATION SERVICESINFORMATION SERVICES
Electronic Data Interchange (EDI)Computer-to-computer exchange of business
informationBanks can advise and provide services
© South-Western Publishing Slide 1616
CREDIT CARD SERVICESCREDIT CARD SERVICESCREDIT CARD SERVICESCREDIT CARD SERVICES
Credit card processingStored-value cardCredit analysis
© South-Western Publishing Slide 1717
CAPITAL SERVICESCAPITAL SERVICESCAPITAL SERVICESCAPITAL SERVICES
Capital investmentsFinancingFactoring
© South-Western Publishing Slide 1818
Lesson 9.4
TRUSTS
Explain what trust services areIdentify important types of trust services banks provide
GOALSGOALS
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WHAT ARE TRUST SERVICES?WHAT ARE TRUST SERVICES?WHAT ARE TRUST SERVICES?WHAT ARE TRUST SERVICES?
A trust is an arrangement by which one party holds property on behalf of another party for certain defined purposes.
The donor, or settlor, is the person who creates a trust.
The beneficiary is the person for whose benefit the property is held.
Corpus, or res, refers to the property that is held.
© South-Western Publishing Slide 2020
TRUST SERVICE PRODUCTSTRUST SERVICE PRODUCTSTRUST SERVICE PRODUCTSTRUST SERVICE PRODUCTS
Retirement planningEstate planningEstate settlementTestamentary trustCharitable remainder trustLiving trust
© South-Western Publishing Slide 2121
RETIREMENT PLANNINGRETIREMENT PLANNINGRETIREMENT PLANNINGRETIREMENT PLANNING
IRA401(k) planVariable annuity
© South-Western Publishing Slide 2222
ESTATE PLANNINGESTATE PLANNINGESTATE PLANNINGESTATE PLANNING
Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death.
An estate is the total property, real and personal, that an individual owns.
The cornerstone of any estate plan is a will, a document by which the individual gives instructions as to what is to happen upon his or her death in regard to property and remains.
Probate is a court proceeding that settles an estate’s final debts and formally passes legal title to property from the decedent to his or her heirs.
© South-Western Publishing Slide 2323
ESTATE SETTLEMENTESTATE SETTLEMENTESTATE SETTLEMENTESTATE SETTLEMENT
Identifying and valuing the estate assetsPaying creditors, estate expenses, and taxesPreparing and filing the necessary tax
documents with federal and/or state authoritiesDistributing assets to beneficiaries
© South-Western Publishing Slide 2424
TESTAMENTARY TRUSTTESTAMENTARY TRUSTTESTAMENTARY TRUSTTESTAMENTARY TRUST
Testamentary trusts are established by a will and take effect at the donor’s death.
They receive the assets of the estate to hold and manage for the benefit of the heirs.
© South-Western Publishing Slide 2525
CHARITABLE REMAINDER TRUSTCHARITABLE REMAINDER TRUSTCHARITABLE REMAINDER TRUSTCHARITABLE REMAINDER TRUST
A charitable remainder trust (CRT) is an irrevocable trust designed to convert the highly appreciated assets of a trustor into a lifetime income stream without generating estate and capital gains taxes.
© South-Western Publishing Slide 2626
LIVING TRUSTLIVING TRUSTLIVING TRUSTLIVING TRUST
A living trust is a legal document that provides an expedient way to transfer property at a person’s death.