Banking Industry Agrees Offshore Yuan Processing Guidelines
View Original ArticleMon, 13 Feb 2012 03:30:02 -0800 The international banking community has agreed a set of guidelines to ensure efficient processing of offshore Chinese yuan transactions, financial messaging network Swift said Monday.
Why rich stash cash offshore
View Original ArticleTue, 14 Feb 2012 14:14:02 -0800 One thing's for sure. Mitt Romney didn't send his money down to the Cayman Islands to work on its tan. The former Massachusetts governor has been criticized by some for factor of five in the last 10 having some of his vast fortune in the Caribbean offshore banking center.
Banking sector hits back at critics
View Original ArticleMon, 20 Feb 2012 18:30:33 -0800 The Australian banking sector has hit back after an offshore analyst cast doubts on the arguments used by the local sector for justifying lifting mortgage rates independently of the Reserve Bank this month.
Banking sector hits back at critic
View Original ArticleMon, 20 Feb 2012 19:35:11 -0800 The Australian banking sector has hit back after an offshore analyst cast doubts on the arguments used by the local sector for justifying lifting mortgage rates independently of the Reserve Bank this month.
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Bank Start-up
Bank Startup Basics
Let's assume you raise $6 million in cash with help from other investors. That will be the bank's initial equity, the owner's stake. Next you obtain a charter, rent a building, furnish it with all the necessary equipment, hire and train a staff, and open your doors for business.
You'll need to deposit some of your initial funds into a correspondent bank. Those funds will be used to clear funds for your depositors. Let's assume initial expenses of $1.2 million. That leaves $4.8 million, of which you allocate $2 million to vault cash and $2.8 million to your correspondent bank's account.
Managing Loans and Other Investments
As your business develops, some customers will deposit their own money to open demand deposit accounts. Others will invest in your savings accounts and certificates of deposit (term loans) which must pay a competitive interest rate. Still others will seek loans from the bank. It is up to you to determine whether prospective borrowers are good credit risks, and will be able to pay the interest charges and return the principal on the specified date.
Accounting Needs
In managing your bank, you will need an accounting system to determine how your decisions are likely to affect the bank's profitability. The most important account is the balance sheet. This shows at any given moment, the bank's assets (what it owns), its liabilities (what it owes to others), and its net worth (what belongs to the owners). Net worth, or equity, is equal to assets minus liabilities. Your equity should remain positive and preferably growing. If it ever gets too low relative to total assets, your regulator may close the bank.
Balance Sheet and Earnings Forecasts
If your bank does well, the balance sheet will expand with new assets and liabilities. The equity should also increase, assuming you retain some of the profits in the bank rather than pay them all out as dividends to the owners.
