Financial Institutions

Warning: mkdir() [function.mkdir]: Permission denied in /home/webs/affiliatelib2/CacheManager.php on line 12

Warning: mkdir() [function.mkdir]: No such file or directory in /home/webs/affiliatelib2/CacheManager.php on line 12

Warning: fopen(/home/templatecore2cache//*cluesnet.com/d2/d2063526a5121f34b063270a3ec22f0e59d40c51.tc2cache) [function.fopen]: failed to open stream: No such file or directory in /home/webs/affiliatelib2/CacheManager.php on line 130

Warning: fwrite(): supplied argument is not a valid stream resource in /home/webs/affiliatelib2/CacheManager.php on line 131

Warning: fclose(): supplied argument is not a valid stream resource in /home/webs/affiliatelib2/CacheManager.php on line 132

In financial economics, a financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority. Common types of financial institutions include banks, building society, credit unions, stock brokerages, asset management firms, and similar businesses.

Function Financial institutions provide a service as intermediaries of the capital and debt markets. They are responsible for transferring funds from investors to companies, in need of those funds. The presence of financial institutions facilitate the flow of monies through the economy. To do so, savings accounts are pooled to mitigate the risk brought by individual account holders (see adverse selection) in order to provide funds for loans. Such is the primary means for depository institutions to develop revenue. Should the yield curve become inverse, firms in this arena will offer additional fee-generating services including securities underwriting, sales & trading, and prime brokerage.

Corporate valuation Relative metrics :Price/EquityPrice/Book Value

Use Equity Multiples (as opposed to Enterprise Multiples). In order to consider how valuing a Financial Institution's balance sheet is different from a non-Financial firm. Consider how an industrials firm wields capital machinery (asset) and the loans (liabilities) it used to finance that asset. The line is blurred in Financial Institutions, which must hold deposit accounts (liabilities) to fuel the issuance of loans (assets). The same accounts are considered loans as they are held in ownership not of the bank, but of the individual client.

Dividend Discount Model :Earnings-per-share

Dividends-per-share

Discounted Cash Flow (DCF) Model :You'll need the FCFE (Free Cash Flow for Equity), which is the amount of money that is returned to shareholders. Calculate a FCFF (Free Cash Flow to the Firm):EBIT(1-tax rate)-Capital Expenditures+(Depreciation & Amortization) - (Net increase in working capital)= FCFF

FCFF-Debt+Cash=FCFE

Use the Capital Asset Pricing Model, not the Weighted Average Cost of Capital (for the same reasons one uses Equity Multiples in relative valuation) to determine the cost of equity (the return required by shareholders in order to make the decision to invest in a financial institutions)

Excess Return Model :

See also

Banking institution
Financial economics
Bank
Consumer Credit Act 1974 (UK law)

Investment Banks (Financial Institutions Group)

ThinkEquity Partners, LLC
Indigo Capital Holding Inc. (New York)
Sandler O'Neill
Keefe, Bruyette & Woods
Fox-Pitt, Kelton
Ryan Beck & Co. bought by Stifel Nicolaus
Hovde Financial LLC

Howe Barnes Hoefer & Arnett Inc.Hales & Co. Inc. bought by Arch Capital (Mgmt Buyout)

Denton Wilde Sapte - Financial Institutions
We have a reputation for excellence within the Banking & Finance sector which is founded upon...

Financial institution - Wikipedia, the free encyclopedia
In financial economics, a financial institution acts as an agent that provides financial services for its clients or members. Financial institutions generally fall under financial ...

Financial Institutions

Windsor - Financial Institutions
Given the increase in accountability and responsibility firms and individuals now face, together with regulatory and legal demands and developments, most financial Institutions ...

Transforming messaging for financial institutions
Transformer is a powerful Java-based message transformation tool used by tier one financial institutions to map, translate, enrich and combine ...

University of Glasgow :: Postgraduate prospectus :: Graduate Schools ...
International Finance & Financial Institutions. www.accfin.gla.ac.uk Postgraduate Office Tel: +44 (0)141 330 4515/8772 Email: pgadmissions@gla.ac.uk

Financial institutions homepage [EBRD - Sectors]
Building financial institutions helps develop sustainable, healthy and competitive financial sectors. The EBRD seeks to achieve these goals mainly through project focused work with ...

Action needed to protect financial institutions
First Minister pledges to 'strain every sinew' to protect jobs in Scotland. ... Listen. Action needed to protect financial institutions. 18/09/2008. The Scottish Parliament today ...

Financial Institutions | Dresdner Kleinwort
Dresdner Kleinwortb s ability to understand and meet the needs of financial institutions is a core aspect of our expertise.

The High Commission of Antigua and Barbuda. Tourism, travel, business ...
Financial Institutions: Tax Issues: Incentives for Investors: Offshore Financial Sector ... A number of international banks have a presence in the country ...