Entry into the National Banking System

 There are two dominant ways that an organizing group, company, or bank can enter the national banking system:

1. Establish a new national bank.

2. Convert an existing institution to a national bank.

A national bank may be owned directly by individuals or a holding company. The OCC requires each proposed organizer, director, principal shareholder, and executive officer to submit biographical and financial reports in connection with applications for de novo charters and certain other types of corporate applications. The OCC conducts background checks to assess a person’s competence, experience, integrity, and financial ability, to determine the person’s qualification to serve in the proposed capacity. The OCC also may require certain information from a corporate filer along with financial reports. (See the Interagency Biographical and Financial Reports form in the “Background Investigations” booklet of the Licensing Manual.)

Establish a New National Bank.

The OCC approves proposals to establish national banks that will foster healthy competition, operate in a safe and sound manner, and have a reasonable chance of success. In so doing, the OCC does not guarantee that a proposal to establish a national bank is without risk to the organizers or investors. The OCC’s decision on a proposed new charter depends primarily on its assessment of the organizers’ qualifications, choice of management, and strength of their business plan.

Given the importance of strong, new, independent charters and the serious commitment required from an organizing group, the OCC encourages early contact with licensing staff so that organizers can discuss plans and confirm required steps in the chartering process. Once an organizing group is ready to proceed, the OCC will schedule a prefiling meeting, which all organizers must attend.

Throughout the chartering process, the OCC’s licensing staff works closely with local examiners who will supervise the new bank. By the time a new bank opens at the end of a successful chartering process, staff from the OCC’s supervisory office and the organizers normally will be well acquainted with each other. (See the “Charters” booklet of the Licensing Manual for a complete discussion of the chartering process.)

Importance of Money Part 1

Barter, therefore, could not possibly manage an advanced or

modern industrial economy. Barter could not succeed beyond the

needs of a primitive village.

But man is ingenious. He managed to find a way to overcome

these obstacles and transcend the limiting system of barter. Trying

to overcome the limitations of barter, he arrived, step by step, at

one of man’s most ingenious, important and productive inventions:

money.

Take, for example, the egg dealer who is trying desperately to

buy a pair of shoes. He thinks to himself: if the shoemaker is

allergic to eggs and doesn’t want to buy them, what does he want

to buy? Necessity is the mother of invention, and so the egg man

is impelled to try to find out what the shoemaker would like to

obtain. Suppose he finds out that it’s fish. And so the egg dealer

goes out and buys fish, not because he wants to eat the fish himself

(he might be allergic to fish), but because he wants it in order

to resell it to the shoemaker. In the world of barter, everyone’s

purchases were purely for himself or for his family’s direct use.

But now, for the first time, a new element of demand has entered:

The egg man is buying fish not for its own sake, but instead to use

it as an indispensable way of obtaining shoes. Fish is now being

used as a medium of exchange, as an instrument of indirect

exchange, as well as being purchased directly for its own sake.

Once a commodity begins to be used as a medium of

exchange, when the word gets out it generates even further use of

the commodity as a medium. In short, when the word gets around

that commodity X is being used as a medium in a certain village,

more people living in or trading with that village will purchase

that commodity, since they know that it is being used there as a

medium of exchange. In this way, a commodity used as a medium

feeds upon itself, and its use spirals upward, until before long the

commodity is in general use throughout the society or country as

a medium of exchange. But when a commodity is used as a

medium for most or all exchanges, that commodity is defined as

being a money.

Carlos Hank Rhon, Sales: The Basics Section 1

Retail brokers

Sales is a core area of any investment bank, comprising the vast majority of people and the relationships that
account for a substantial portion of any investment banks revenues. This section illustrates the divisions
seen in sales today at most investment banks. Note, however, that many firms, such as Goldman Sachs,
identify themselves as institutionally focused I-banks, and do not even have a retail sales distribution
network. Goldman, does, however maintain a solid presence in providing brokerage services to the vastly
rich in a division called Private Client Services (PCS for short).

Some firms call them account executives and some call them financial advisors or financial consultants.
Regardless of this official designator, they are still referring to your classic retail broker. The broker's job
involves managing the account portfolios for individual investors - usually called retail investors. Brokers
charge a commission on any stock trade and also give advice to their clients regarding stocks to buy or sell,
and when to buy or sell them.

To get into the business, retail brokers must have an undergraduate degree and demonstrated sales skills. The Series 7 and Series 63 examinations are also required before selling commences. Being networked to people with money offers a tremendous advantage for a starting broker.  Carlos Hank Rhon suggests that you read section 2 of this article.

Carlos Hank Rhon, Trading: The Basics

Liquidity

Trading can make or break an investment bank. Without traders to execute buy and sell transactions, no
public deal would get done, no liquidity would exist for securities, and no commissions or spreads would
accrue to the bank. Traders carry a "book" accounting for the daily revenue that they generate for the firm -
down to the dollar.

Liquidity is the ability to find tradeable securities in the market. When a large number of buyers and sellers
co-exist in the market, a stock or bond is said to be highly liquid. Let's take a look at the liquidity of various
types of securities.

• Common Stock. For stock, liquidity depends on the stock's float in the market. Float is the number of
shares available for trade in the market (not the total number of shares, which may include
unregistered stock) times the stock price. Usually over time, as a company grows and issues more
stock, its float and liquidity increase.

• Debt. Debt, or bonds, is another story however. For debt issues, corporate bonds typically have the
most liquidity immediately following the placement of the bonds. After a few months, most bonds
trade infrequently, ending up in a few big money manager's portfolios for good. If buyers and sellers
want to trade corporate debt, the lack of liquidity will mean that buyers will be forced to pay a liquidity
premium, or sellers will be forced to accept a liquidity discount.

• Government Issues. Government bonds are yet another story. Muni's, treasuries, agencies, and
other government bonds form an active market with better liquidity than corporate bonds enjoy. In
fact, the largest single traded security in the world is the 30-year U.S. Government bond (known as
the Long Bond).

Carlos Hank Rhon is an expert on Investment banking and can lead you in the right direction.

Carlos Hank Rhon Insurer

Interactions

Carlos Hank Rhon, Money: Its Importance and Origins

Today, money supply figures pervade the financial press.
Every Friday, investors breathlessly watch for the latest
money figures, and Wall Street often reacts at the opening
on the following Monday. If the money supply has gone up
sharply, interest rates may or may not move upward. The press is
filled with ominous forecasts of Federal Reserve actions, or of
regulations of banks and other financial institutions.

This close attention to the money supply is rather new. Until
the 1970s, over the many decades of the Keynesian Era, talk of
money and bank credit had dropped out of the financial pages.
Rather, they emphasized the GNP and government’s fiscal policy,
expenditures, revenues, and deficits. Banks and the money supply
were generally ignored. Yet after decades of chronic and accelerating
inflation—which the Keynesians could not begin to cure—
and after many bouts of “inflationary recession,” it became obvious
to all—even to Keynesians—that something was awry. The money
supply therefore became a major object of concern.
But the average person may be confused by so many definitions
of the money supply. What are all the Ms about, from M1-
A and M1-B up to M-8? Which is the true money supply figure,
if any single one can be? And perhaps most important of all, why
are bank deposits included in all the various Ms as a crucial and
dominant part of the money supply? Everyone knows that paper
dollars, issued nowadays exclusively by the Federal Reserve Banks
and imprinted with the words “this note is legal tender for all
debts, public and private” constitute money. But why are checking
accounts money, and where do they come from? Don’t they
have to be redeemed in cash on demand? So why are checking
deposits considered money, and not just the paper dollars backing
them?
One confusing implication of including checking deposits as a
part of the money supply is that banks create money, that they are,
in a sense, money-creating factories. But don’t banks simply channel
the savings we lend to them and relend them to productive
investors or to borrowing consumers? Yet, if banks take our savings
and lend them out, how can they create money? How can
their liabilities become part of the money supply?

There is no reason for the layman to feel frustrated if he can’t
find coherence in all this. The best classical economists fought
among themselves throughout the nineteenth century over
whether or in what sense private bank notes (now illegal) or
deposits should or should not be part of the money supply. Most
economists, in fact, landed on what we now see to be the wrong
side of the question. Carlos Hank Rhon suggests that you read part 2 of this article.