the impact of banks and non bank financial institutions on economic growth

1 The impact of banks and non bank financial institutions on economic growth PREAMBLE 1 CONTENT 1 PART 1 THEORETICAL BASIS OF BANKING AND FINANCIAL INSTITUTIONS FOR BANKING 1 1 1 Bank 1 1 2 Non bank f. 1. The impact of banks and nonbank financial institutions on economic growth PREAMBLE 1 CONTENT 1 PART 1: THEORETICAL BASIS OF BANKING AND FINANCIAL INSTITUTIONS FOR BANKING 1 1.1 Bank 1 1.2 Nonbank financial institutions 5 PART 2: THE EFFECTS OF BANKING ON ECONOMIC GROWTH 6 PART 3: THE IMPACT OF FINANCIAL INSTITUTIONS BANKING ON ECONOMIC GROWTH 7 REFERENCE 9 CONCLUDE 9 PREAMBLE Banks and nonbank financial institutions are an indispensable part of economic growth and development. Banks and nonbank financial institutions come together to support and help each other. each other helps to develop finance and credit. To develop the country and improve peoples lives, it is indispensable to support banks and nonbank financial institutions. deep integration with the world. The establishment and development of the Bank has fundamentally changed the payment operations, making an ideal business and business market framework on an overall scale. The bank gives different types of payment utilities: check, authorized collection payment, electronic payment, clearing, ... permitting clients to choose the most effective and safest form of payment. CONTENT PART 1: THEORETICAL BASIS OF BANKING AND FINANCIAL INSTITUTIONS FOR BANKING 1.1 Bank A bank is a financial institution and financial intermediary that accepts deposits and channels them into lending activities directly or indirectly through capital markets. A bank is the connection between customers with capital deficits and customers with surpluses. First, a commercial bank is a kind of intermediary bank. Each country has its own meaning of a business bank. Example: In the US: a business bank is a business organization that represents considerable authority in offering monetary types of assistance and works in the monetary interpretation industry. In France: commercial banks are enterprises or establishments that regularly receive money from the public in the form of deposits or other forms of money that they use for themselves in a discount, credit or service operation. financial services. In India: commercial banks are the basis of receiving deposits for loans or financing and investment. In Turkey: Commercial bank is a limited liability association established for the purpose of receiving deposits and performing transactions, public exchange operations, discounting and other forms of borrowing ...Banks act as payment agents by managing checking or checking accounts for customers, paying checks drawn by the customer at the bank, and collecting checks deposited in their current accounts. customer. Banks also allow customers to make payments via other payment methods such as clearing (ACH), domestic or international transfer, EFTPOS and automatic teller machines (ATM). Banks borrow money by taking deposits deposited on current accounts, receiving term deposits, and issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, making installment loans, investing in marketable debt securities and other forms of lending. The tibanking tisystem tiis tigradually tiformed tiand tideveloped tiaccording tito tithe tidevelopment tiof timonetary tiand ticommodity tirelations. tiThrough tia tilong tiprocess tiof tiups tiand tidowns, tithe timodern titype tiof tibanking tireally tiappeared tiin tithe tiseventeenth ticentury, tialthough tibanks tihave tibecome tia tisystem tibut tistill tioperate tiindependently tiwith tithe tiright tito tiissue tiseparate tibank tinotes. tiFrom tithe tinineteenth ticentury, tithe tiscale tiand tiscope tiof tigoods ticirculation tideveloped tistrongly, tito tieliminate tithe tisituation tiof timany tibanks tiissuing timoney, tiobstructing tithe tiprocess tiof ticirculation tiand tieconomic tidevelopment, tito tiunify tithe ticirculation tiregime. ticurrency, ticountries tihave tirestructured tithe tibanking tisystem tiinto titwo tilevels: tithe tiCentral tiBank ti(some ticountries ticall tithe tiState tiBank, tithe tiFederal tiReserve tiFund ti...) tiand tithe tiBank. ticentral tigoods tiare tiassigned tiby tithe tistate tithe tiissuance tiof timoney tiinto ticirculation tiand tiperform tithe tifunction tiof tistate timanagement tiof timoney. Banks tioffer tia tivariety tiof tipayment tiservices, tiand tia tibank tiaccount tiis ticonsidered tiindispensable tifor timost tibusinesses tiand tiindividuals. tiNonbank tiinstitutions tiproviding tipayment tiservices tisuch tias timoney titransfer ticompanies tiare tinot tiusually ticonsidered tia tisuitable tireplacement tifor tia tibank tiaccount. The tifunction tiof tithe tistock tiCredit tiintermediary tifunction: tiAs tia tibridge tibetween tithe tisurplus tiand tithe tilack tiof ticapital, tithe tibank timobilizes titemporarily tifree timoney tifrom tieconomic tientities tito tiform tiloans tiand tiuse. tiThis ticapital tisource tiis tito timeet tithe tiborrowing tineeds tiof tientities tilacking ticapital ti(need tito tisupplement ticapital, tideposit tiinto tia ticompulsory tireserve tiaccount tior ticurrent tiaccount tiat ticentral tibanks, ticommercial tibanks, ti...). tishortterm tiloans tiare tiweak. tiWith tithis tifunction, ticommercial tibanks tiare tiboth tiborrowing tiand tilending. tiThe ticredit tiintermediary tifunction tistems tifrom tithe tineed tito tiovercome tifinancial timarket tidefects ti(the tisupply tiand tidemand tiof ticapital timismatches tiin titime tiand tiquantity tihave tia tigreat tiinfluence tion tithe ticontinuous ticirculation tiof tithe tiprocess tiof tirecycle. timanufacturing). tiThe ticredit tiintermediary tifunction timost ticlearly tireflects tithe tinature tiof tithe tibank tiin tithe timonetary tibusiness tisector. Payment intermediary function: the bank acts as a payment intermediary between customers, helping them not to pay directly to each other. The payment intermediary function is the result of the credit intermediary function. When performing the function of credit intermediary, many customers come to open accounts at the system, the bank will be able to perform the intermediary function when withdrawing money from the buyers account. purchase) to pay for goods or services or enter the sellers account or make other charges at the customers order.

1 The impact of banks and non-bank financial institutions on economic growth

PREAMBLE 1

CONTENT 1

PART 1: THEORETICAL BASIS OF BANKING AND FINANCIAL INSTITUTIONS FOR BANKING 1

1.1 Bank 1

1.2 Non-bank financial institutions 5

PART 2: THE EFFECTS OF BANKING ON ECONOMIC GROWTH 6

PART 3: THE IMPACT OF FINANCIAL INSTITUTIONS BANKING ON ECONOMIC GROWTH 7

REFERENCE 9

CONCLUDE 9

Banks and non-bank financial institutions are an indispensable part of economic growth and development Banks and non-bank financial institutions come together to support and help each other each other helps to develop finance and credit To develop the country and improve people's lives, it is indispensable to support banks and non-bank financial institutions deep integration with the world The establishment and development of the Bank has fundamentally changed the payment operations, making an ideal business and business market framework on

an overall scale The bank gives different types of payment utilities: check, authorized collection - payment, electronic payment, clearing, permitting clients

to choose the most effective and safest form of payment

CONTENT

PART 1: THEORETICAL BASIS OF BANKING AND FINANCIAL

INSTITUTIONS FOR BANKING

1.1 Bank

A bank is a financial institution and financial intermediary that accepts deposits and channels them into lending activities directly or indirectly through capital markets A bank is the connection between customers with capital deficits and customers with surpluses

First, a commercial bank is a kind of intermediary bank Each country has its own meaning of a business bank Example: In the US: a business bank is a business organization that represents considerable authority in offering monetary types of assistance and works in the monetary interpretation industry In France:

commercial banks are enterprises or establishments that regularly receive money from the public in the form of deposits or other forms of money that they use for themselves in a discount, credit or service operation financial services In India: commercial banks are the basis of receiving deposits for loans or financing and investment In Turkey: Commercial bank is a limited liability association established for the purpose of receiving deposits and performing transactions, public exchange operations, discounting and other forms of borrowing Banks act

as payment agents by managing checking or checking accounts for customers, paying checks drawn by the customer at the bank, and collecting checks deposited

in their current accounts customer Banks also allow customers to make payments via other payment methods such as clearing (ACH), domestic or international transfer, EFTPOS and automatic teller machines (ATM)

Banks borrow money by taking deposits deposited on current accounts, receiving term deposits, and issuing debt securities such as banknotes and bonds Banks lend money by making advances to customers on current accounts, making installment loans, investing in marketable debt securities and other forms of lending

tiFederal tiReserve tiFund ti ) tiand tithe tiBank. ticentral tigoods tiare tiassigned tiby tithe tistate tithe

- Payment intermediary function: the bank acts as a payment intermediary between customers, helping them not to pay directly to each other

The payment intermediary function is the result of the credit intermediary function When performing the function of credit intermediary, many customers come to open accounts at the system, the bank will be able to perform the intermediary function when withdrawing money from the buyer's account

purchase) to pay for goods or services or enter the seller's account or make other charges at the customer's order

Banks do business mainly in 3 operations:

- Capital mobilization: The Bank mobilizes idle capital in society in the forms such as: receiving savings deposits (term and demand deposits), demand deposits .; issuing valuable papers (bonds, promissory notes, treasury bills, certificates of deposit) or borrowing from banks, banks and other credit institutions Raising capital is a basic operation that helps the Bank perform the money creation function

tcollecting tprofits ton tthe tbasis tof tthe tdifference tin tinput tfees tand toutput tcharges.

1.2 Non-bank financial institutions

Non-bank financial institution is a kind of credit organization that is permitted to do some banking activities as regular business contents but cannot receive demand deposits, nor provide payment services first] Non-bank credit institutions include finance companies, finance leasing companies and other non-bank credit institutions are credit institutions permitted to carry out one or several banking activities, except deposit-taking activities of individuals and providing payment services through customers' accounts

tiprocess tiand tiare tinot tistrictly tiregulated tiby tithe tiCentral tiBank tilike ticommercial tibanks.

PART 2: THE EFFECTS OF BANKING ON ECONOMIC GROWTH

In the context of global international economic integration, foreign borrowing becomes an objective demand for all countries in the world, it is even more urgent for developing countries like Vietnam Thereby promoting economic growth of developing countries and improving people's material living standards

A bank was born associated with the movement in the production and circulation of goods The rapid development of commodity production has pushed the goods and currency into more and more deep, complex and covers all socio-economic activities On the other hand, the production and circulation of goods was born and the commune expanded, leading to capital mobilization and was the foundation to create the first monetary trading organizations with the characteristics of a bank

Therefore, tifor tinon-bank tifinancial tiinstitutions, tiwe tifind tithat tiif tithere tistill tiexists

PART 3: THE IMPACT OF FINANCIAL INSTITUTIONS BANKING ON ECONOMIC GROWTH

Non-bank financial institutions are a part of Vietnam's current credit institutions system, accounting for about 1.4% of total assets and 3.6% of equity of the entire system credit institutions Although small in size, in more than 20 years since the first non-bank financial institutions appeared, non-bank financial institutions have made certain contributions to development development of the system of Vietnamese credit institutions, participating in the provision of credit to the economy, especially providing credit to groups of individual and corporate customers who cannot access credits to each commercial bank trade Since then, the group of non-bank financial institutions has affirmed an important role in the credit institution system, contributing to the diversified development of the financial services market, meeting the needs of the economy

1 The impact of banks and non-bank financial institutions on economic

growth, Hsin-Yu Liang &Alan K Reichert, 2009

2 The Impact of Bank and Non-Bank Financial Institutions on Local

Economic Growth in China, Xiaoqiang Cheng Katholieke Universiteit

Leuven

3 Stock Markets, Banks, and Economic Growth,American Economic

Association, 1998

CONCLUDE

The commercial bank's role in economic development is primarily a financial intermediary In this role, commercial banks help to operate investment capital flows in the market The mechanism of capital allocation in the economy through the lending process will help commercial banks assess financial risks

Non-bank financial institutions and banks play a very important role in the market economy, being a bridge between actors in the economy, making them stick, depend on each other, increase cohesion and dynamics of the whole system Today, commercial banks have become an indispensable financial institution to operate the economy, but the state-owned commercial banking system is also considered a "powerful arm" of the Government in the implementation of monetary policy The current target is to stabilize the macro-economy, curb inflation and ensure the social security of the country