Banks in Europe

The second level of the British banking system are the commercial banks and finance companies.
UK commercial banking system is highly differentiated. In it, the principle of special banks. In this case there two trends. On the one hand, specialization is an attempt to change adaptation banks money supply and demand. On the other hand, there is a tendency to expand the operations of the largest commercial banks and savings banks abroad.
British banks group is not easy. The Bank of England divides operating in the UK commercial banks into 3 groups:
1. deposit banks (retail (retail banks) or "high street banks (" high street banks "));
2. house accounts;
3. acceptance at home, foreign banks, and other banks.
Deposit bank
The most important deposit bank of England are clearing banks. This is the largest joint stock banks, which are connected by clearing obligations. After the last major mergers in the late 60's at the head of all the clearing banks is "Big Four": Barclays, National Westminster, Midland, and Lloyds. These giants, add a small caveat has 2 banks - "Williams End Glines" (controlled by the "Standard Charted") and "Kauts" (controlled by "Neshnl Westminster"). These six banks now have in England and Wales, more than 12 thousand units. In Scotland and Northern Ireland, the largest British banks are prohibited from opening branches, so they have this many participations in local deposit banks, and that in Scotland and Northern Ireland to be able to influence the policies of commercial banks. These six banks (including their affiliates) drops almost 90% of the operations of all deposit banks and half of all sterling deposits in UK banks. Compared with other countries, the giant British banks held at the beginning of the 70's the lead, but in the early 80's their situation has worsened. The situation did not change, and especially in the nineties.
The largest bank in the UK - "Barclays Bank". Around it are grouped many subsidiaries, which is typical for the other giant banks. In addition to "Barclays Bank JK Management Limited", there are subsidiaries in which "Barclays Bank" has a 100% interest. This - "Barclays Merchant Co., Ltd." 1650 branches in 50 countries, "Barclays Inshurens Service Company Ltd." (As an insurance company) and "Barclays Bank Trust Company." We should also call the company "Barclays Export End FINANCE COMPANY LTD.", Which deals in leasing, export financing and factoring. There are many smaller subsidiaries.
Basic operation of the clearing banks - taking deposits and issuing loans. Clearing banks settle payments for large, medium and small industrial enterprises, as well as to the public. Payment transactions between banks is within the clearing agreement, which means the offset of mutual claims and transfer balances. In the 80 years of the annual count towards more than £ 1 billion on checks between banks. In clearing banks pronounced tendency to universalise, and they have more non-banking services. Services include preparation of individual construction, service industry financial transactions, preparation and export financing, leasing companies computers for payroll, etc.
New to the clearing banks became agents for life insurance and travel arrangements. All this allows us to characterize clearing banks as financial conglomerates, whose banking operations are only part of the activity.
The liberalization of financial markets and the progress in communication and computer technologies have created opportunities for the continued expansion of services. Intense competition is in banking pushed banks to merge with other financial institutions. A striking example of this process was the formation of the UK's largest bank Financial Association - Hong Kong and Shanghai Banking Corporation Holdings, ranked 9th in the world. In this association included international, mostly Asian, capital and two British banks - Samuel Montagu and Midland Bank.
Sphere of interest groups - Asia, Hong Kong, Australia, New Zealand, USA, Canada and the UK. It provides specialized associations and foundations, in particular, Wardly Group consisting Hohg Kong Bank Group and Montagu Private Equity in the Midland Group.
Its range of services to the Group virtually unlimited:
§ retail and corporate services;
§ payment operations service trade;
§ individual and investment banking services;
§ Capital Markets;
§ consumer and commercial finance (hire purchase financing);
§ management of pension and investment funds;
§ custodial control over the different types of property in trust;
§ insurance;
§ service and safety.
By clearing banks should include a banking institution control money orders as "Neshnl Giraud" (Girobank), based post office in 1968, despite a long and severe protests by the major banks. "Neshnl Giraud" provides new postal services and check that the clearing bank is serious competition. Set up a center of electronic payments in Bootle, and the "Giro" serves postal payments through a network of offices in 22 thousand postal services. Already in 1973 he had over 500 thousand customers in the industry and the community. In contrast to the clearing banks that charge high fees and often unpredictable for the translation, "National Giro" charges based on correct and the published rates. Together with a special bank "Merchant Credit" gives as postal services loans for up to 5 years on favorable terms. In addition, "National Giro" cooperates with similar companies in other countries.
To deposit money banks are so-called financial houses, which include, above all, special banks consumer credit. About 2/3 of their active operations account for consumer loans in installments, in turn, more than 60% of these loans is financing car purchases. For registration of the issuance of consumer credit customer fills the application form. After the analysis of data that it contains the bank's decision to provide the loan. Before issuing a defined amount of the loan and the term of repayment. Currently, loans are in excess of 500 GBP, 100 fold, and there is no upper limit. Private individuals the opportunity to repay the loan insurance. The maximum loan period of use - 5 years.
Growing importance of leasing operations. Financial houses are usually subsidiaries of major banks and insurance companies that support the credit of these banks within their means. Major financial houses are trying to maximize the banking operations to be able to attract savings deposits and develop into universal banks. The financial houses should also include the special banking outlets in shopping centers (MoneyShops). First specialized bank branches appeared in 1970. These were the offices of the American "First National City Bank of New York." Later, the largest and British banks began to open branches in shopping centers. At the end of 1974 it had dropped to 120. They are designed for those people who do not have bank accounts. Despite the strong development of the largest banks of checks by using checks and credit cards, designed primarily for individuals, in 1974 only 35% and in 1981 57% of all adult Britons have current accounts. Particularly prevalent among workers cash payments at the end of the week or ten days. By connecting specific bank branches. They simulated stressed confidential atmosphere, and they are open longer than clearing banks, even on a Saturday. First of all, provided with individual loans, ie, loans to individuals with little financial security. Increasingly, however, they begin to carry out normal banking operations, including investment. Financial houses are paid through bank loans, discounting bills, and by attracting deposits of large industrial and commercial companies.
Merchant banks
          The next group of deposit banks are commercial banks (Merchant Banks). They are widely distributed in the UK and have a long tradition. Merchant banks are difficult to differentiate and compare with the clearing banks, as they are much smaller than the latter. The largest of them - "Gambros Bank" held in 1982 in the list of the leading banks in the world only 173 seats. However, trade, banks play a role not only in internal operations, but also in international business. They originated in trade, which gradually mastered banking. Some modern commercial banks, along with bank operations serve more industrial and commercial functions. Merchant banks "NM Rothschild and Sons," "J. Henry Schroder Wagg & K", "Berring Brothers", "SG Warburg & K," or "Lazard Brothers & K" have existed for over 100 years. However, some of the major clearing banks or have their special trading banks, as is typical, for example, of the "Barclays" or participate in traditional retail banks.
          Honors merchant banks from clearing, while their privilege is that they are not obliged to publish the details of the financial condition and on its operations. With this privilege merchant banks could over the years to develop freely.
Merchant banks are mainly engaged in 3 major areas:
1. Truly banking. They are understood traditional acceptance and credit operations. This applies to the Committee acceptor houses (17 famous merchant banks in the so-called "Committee of acceptor houses" - Acceptiry Houses Committee). If the merchant bank declares himself ready to accept the bill and thus pay the bill at the time of submission of a short-term, this bill gets especially high confidence. If this bill will be considered in other banks, the discount rate on it could be lower. Acceptance and, therefore, guarantee of payment merchant bank that owns the right to acceptance, is valued much higher than that of a foreign bank. The next type of merchant banking is accepting and issuing loans in pounds sterling for a period of one day to six months. However, contributions may be made in foreign currency, but the loans are usually in pounds sterling. From the beginning, merchant banks have played a huge role in the development evrooperatsy, and two of them were, in fact, the inventors of the Eurodollar. If you have large funds needed for long periods, the trading banks create consortia. Together with other banks or other holders of consortia issue debt and, under certain circumstances and Euroloan. These activities include field and export financing.
2. Provision of services to entrepreneurs. Behind this advice to entrepreneurs, such as mergers, revealing to them the best opportunities of financing; advice about whether to purchase the shares, as well as the development of new forms on the stock market.
3. Securities management. These services include not only holds securities, but, above all control of the societies, which can be treated as joint-stock companies of industry and trade, and investment companies, pension funds, as well as other private foundations. To maintain its exclusivity in the management of funds, the largest retail banks do not take in their portfolio (total securities) values ​​below the value of 100 thousand GBP.
Merchant banks involved in these three areas of the business to the same extent. Between major banks specialization exists. Bank "Samuel Montagu" not engaged in service businesses, it is one of the largest gold trader in the capitalist world and the largest currency trader in London. Bank "Robert Flemming" primacy in portfolio transactions and manages the fund assets. "Rothschild" is mainly engaged evrooperatsiyami and trade in gold. In the so-called gold room Rothschild banking house in London is daily trading in gold (goldfixing). This involved, except for the banking house of Rothschild, which traditionally takes place presiding, 4 more retail bank admitted to trading gold in London: "Johnson Mathey & K", "Samuel Montagu & K", "Goldsmith Mokatta End End Sharps" , "Pixley". Gold Trading takes a few minutes and the results at one time extended to all financial centers of the world. But London has lost its former significance. At present 85% of the gold coming from South Africa to the international market, passes through three Swiss banks in Zurich and only 15% - London.
As London and Zurich almost agree on supply and demand, as well as on prices, on this basis, the City of London can still continue to deal in gold. Gold Trading is not much different from trade in other commodities, such as trading on the London Stock Exchange or the London Stock Exchange precious metals. Description of the activities of commercial banks shows that they are not much different from the clearing banks in terms of the types of transactions. Differences are only in the way of implementation. In the economic literature clearing banks with their standard banking services called "garment shop owners", and trading houses - "fashion financial transactions."
User home
The next type of bank account in England are at home. Currently in London, operates on 8 accounts and individual homes, small specialized firms, brokers (running brokers, money brokers), which together form a discount market in London.
User home together in London's association accounting market (London Discount Market Association, LDMA), whose members are the home user: CL Alexanders Discount Plc.; Cater Allen Ltd.; Clive Discount Co. Ltd; Gerrald and National Ltd; king and Shaxson Ltd; Quin Cope Limited; Seccombe Marshall and Campion Plc; Union Discount Company Ltd.
Credentials at home - this is a specific type of financial institution, the London market. They provide a convenient outlet for liquid assets by banks guaranteed deposits on demand (at an agreed rate of credit to, or within the due date). These funds are used to buy various assets, including short-term treasury bills (T-bills), commercial paper (commercial bills) and first-class paper stock (gilt-edged securities, gilts). In addition, the user at home - it is the market sales and purchase bills.
User home act as a buffer between the Bank of England and the rest of the banking system, through which the Bank of England provides the financial resources of the banking system, withdraw them. The Bank of England also has an impact on interest rates.
For British companies main functions are to provide credentials houses leveraged through discounting (rediscounting) of bills, as well as offering various forms of short-term investments in portfolio investment.
In the field of government finance their main task - to ensure the sale of short-term Treasury bonds, which are very essential part of short-term government borrowing activities. User home - active agents to sell short-term government securities (stocks), as well as shares and bonds of local authorities. Activity accounts homes is on the secondary market the assigned dollar and sterling certificates of deposit.
          Firm-brokers (brokers) are agents that mediate the acquisition of bills for payment. Accounts collect free money home almost around the clock. In this case, it is a perpetual or current accounts mainly clearing banks, as well as the money of industrial and commercial companies. Specificity clock collected funds is that they can one day go on to another investor. Opportunity to review the daily mean, on the one hand, a greater degree of insurance for investors, who may in the day, as put money back to provide a loan. On the other hand, for the money you can earn interest and, therefore, for the clearing banks more profitable to invest in accounts at home instead of keeping them at home, as a rule, no profitable use. These funds invest at home user backup supply of the Bank of England in securities, such as commercial bills, treasury bills (short-term government securities) and government loans with a really short-lived, as well as municipal bonds and debt securities of other banks. Possibility of daily review of contributions and their practical room for 30, 60, 90 days, and sometimes longer requires the ability to quickly mobilize resources. If, for example, a separate investor suddenly withdraw a large sum of money, you have to be quick to raise new funds. If the discount house an unexpected seizure contributor very large amounts are not able to immediately find new tools, it applies to the Bank of England for a loan. But this is possible only for the special accounts of houses, for example, Seccombe Marshall & Campion plc, which is a link between all accounting houses and Bank of England. Such an opportunity to refinance at the Bank of England is a privilege, relating only to the records home. They buy the privilege almost to commit to subscribe to all the notes of the Treasury, the Bank of England daily writes. This relationship accounts with the Bank of England houses involves two aspects of monetary policy. On the one hand, the Bank of England is trying through daily communication with the accounting houses affect existing bank funds to more profitable use, and on the other hand, it is through your home holds its credit interest rate policy by adjusting the flow of funds.
Commonwealth Banks
International importance of London as a financial center is determined, first of all, the position of the British banks abroad and the presence of foreign banks in the City. British foreign banks (Overseas banks) are institutions headquartered in London, with offices - mainly former British colonies. These banks are also referred to as the Commonwealth Banks. At the head is "Barclays Merchant Bank" from 1650 branches abroad. "Standard Charted" has more than 1,400 branches. In comparison, the U.S. Citibank has 300 overseas branches.
Foreign banks
Foreign Banks (Foreign Banks) in England at the carrying amount are major banking groups. Already in 1978 in London, there were 308 foreign affiliates in 63 countries. Among the banking institutions were 24 Japanese and 53 banks of the EU Member States. Now in the UK is dominated by U.S. and Japanese banks.
In London, concentrated in 2 times more foreign subsidiaries than in New York. For foreign banks in London is The People's Bank of Moscow (Moscow Narodny Bank).
Next banking group in England are consortium bank (Consortia Banks). Under the latest banking statistics understands institutions, where there are banks of at least two countries, neither of which has a controlling interest. these institutions have been particularly rapidly with increasing the EU market. Mostly, it's a special multinational banks borrowers, which include primarily transnational and multinational industrial concerns. Since they were established on the basis of equity banks leading capitalist countries, oriented in a position to mobilize huge resources in the Euromarket and the longest time, which is not available to any other type of banks in the capitalist world. The emergence of syndicated banks particularly well illustrated by the development of the process of internationalization of capital in contemporary capitalism. The largest consortium bank include "End Midland International Bank Ltd." with the British, Canadian and Australian partners, "Western American Bank Ltd. EuropeAid." with British, American and Japanese partners, "Indastriel kommershiel Burley" with partners from the U.S., Japan and the UK.