The Prime Functions in a Banking System

The Prime Functions in a Banking System

Chris Blake

Director

In this video, Chris provides an overview of what a bank is, the prime functions of banks and how they came about, alongside the balance sheet risks that arise from these functions, and how they are mitigated. In addition, he will look at how banks actually create money.

In this video, Chris provides an overview of what a bank is, the prime functions of banks and how they came about, alongside the balance sheet risks that arise from these functions, and how they are mitigated. In addition, he will look at how banks actually create money.

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The Prime Functions in a Banking System

9 mins 3 secs

Key learning objectives:

  • Explain and understand the prime functions that are performed by the banking system.

  • Examine the nature of payments and the link to a bank’s ledger

  • Understand the linkage from safekeeping to the lending function of a bank

  • Define and identify the types of maturity transformations banks make

  • Understand how banks actually “create” money

Overview:

To understand bank asset and liability management (ALM), sometimes called “Treasury” requires a firm grasp of what banks do and what makes them different from corporates and other types of financial institutions, including creating money, running the “so called” ledger and undertaking a number of transformations including size, maturity, credit and interest rate, alongside making payments.

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Chris Blake

Chris Blake

Chris Blake holds a degree in Economics and Government from the London School of Economics. He is responsible for helping HSBC professionals understand balance sheet risk and return. He has previously worked as a risk specialist in ALM for the FSA. Prior to that, he worked as a money market and interest rate derivatives trader for Investec. Chris is also the Co-chair and Education Director of the UK Asset and Liability Management Association.

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