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© South-Western Publishing Slide 1 1 SPECIALIZED BANK SERVICES 9.1 9.1 International Banking 9.2 9.2 Insurance and Brokerage 9.3 9.3 Cash Management 9.4 9.4 Trusts 9 9

© South-Western Publishing Slide 1 SPECIALIZED BANK SERVICES 9.1 9.1 International Banking 9.2 9.2 Insurance and Brokerage 9.3 9.3 Cash Management 9.4

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Text of © South-Western Publishing Slide 1 SPECIALIZED BANK SERVICES 9.1 9.1 International Banking 9.2 9.2...

SPECIALIZED BANK SERVICESIdentify three types of financial institutions engaged in international banking
Describe international services offered by banks
GOALS
Special considerations
Financial risk
Currency risk
Country risk
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INTERNATIONAL SERVICES
Trade financing
Small business administration (SBA)
GOALS
The new world: Gramm-Leach-Bliley ACT (GLBA)
Limits and regulation
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.
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Lesson 9.3
CASH MANAGEMENT
Explain why banks are in a good position to offer cash management services
List several cash management services banks perform for businesses
GOALS
SYSTEM 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.
Experience
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INFORMATION SERVICES
Banks can advise and provide services
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Identify important types of trust services banks provide
GOALS
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.
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401(k) plan
Variable annuity
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ESTATE 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.
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ESTATE SETTLEMENT
Identifying and valuing the estate assets
Paying creditors, estate expenses, and taxes
Preparing and filing the necessary tax documents with federal and/or state authorities
Distributing assets to beneficiaries
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TESTAMENTARY 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.
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CHARITABLE 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.
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LIVING TRUST