Week 2 Assignment
What laws and regulations have a bearing on where you might be able to locate the new facilities and what services you may offer?
Bank regulation in the United States is highly fragmented compared to other G10 countries where most countries have only one bank regulator. In the US banking is regulated at both the federal and the state level. The bank may be subject to numerous federal and state regulators depending upon the charter-type and organizational structure. The US maintains separate securities, commodities, and insurance regulatory agencies at the federal and state level. The US has one of the most highly regulated banking environments in the world, focusing on privacy, disclosure and prevention, anti-money laundering, terrorism, anti-usury lending. Individual cities can enact their own financial regulation laws. (http://www.bankersonline.com)
It would be difficult given these regulations on just where you can open a bank. Even a city can impose their own laws as well as dealing with the laws and the fed and state levels. I think if you were a branch of a larger bank the transition of opening branches would be much easier than a smaller bank trying to open new branches.
What Advantages would your branch likely to have over the old unit bank? What disadvantages are likely to come with adding branch offices? Any ideas on how you might minimize these disadvantages?
The advantages in Bank branching allows for greater efficiency. It provideds for easy improved and convenience services to customers. Branching reduces transaction costs for customers, it provides security against the risk of failure as it leads to increase in assets as well as growth in the banking industry.
Some disadvantages are: full branching may lead to increase in operation and servicing costs. It may lead to edging out of small competitors.
On minimizing the disadvantages I would cut operation costs by...
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