A bank is a business that borrows from its customers on current accounts repayable to its customer's cheques and collects cheques for its customers' accounts. Banks may also issue bank notes, and lend money to customers on currenct account(called overdraft), accept term deposits and make term loans and provide other financial services. Banks that issue notes are called Banks of Issue.

Currently in most jurisdictions the business of banking is regulated and banks require a licence. Banking licenses are granted by bank regulatory authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so called non-banking financial company.

Banks have a long history, and have influenced economies and politics for centuries.

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The Economist: Banking

New banking measures: Chipped, not broken
Thu, 05 Nov 2009 11:01:13 -0000
The latest chapter in the banking rescue is less novel than it seemsJUST over a year ago, as Britain’s banking system suffered a near-death experience, the government resuscitated it with an emergency infusion of capital. This week Alistair Darling pumped in yet more money, leading to accusations that policy failures had brought about another big bail-out. The chancellor of the exchequer, for his part, made much of moves to create a more competitive banking market, forcing the two big banks that have gobbled up state aid—Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG)—to pay for it by shedding branches and customers. In fact, this latest chapter in the banking rescue is neither a new bail-out nor the dawn of a new competitive era. The government’s sudden interest in opening up the market was in any case the result of pressure from Europe (see article). And despite much hoopla before this week’s announcement about breaking up the banks, it amounted to precious little. ...
Contingent capital: CoCo nuts
Thu, 05 Nov 2009 11:01:13 -0000
Lloyds is first out of the gate with a new kind of capitalMENTION hybrids these days, and most people think of fuel-efficient cars. In banking, however, the word has less pleasant connotations. Hybrid forms of capital were meant to combine the cheapness of debt with the support that equity offers to banks in times of crisis. Yet they proved to be less well-bred than originally planned. When an extra capital cushion was needed to protect depositors and other creditors, these hybrid instruments could not provide it without the bank first defaulting.Now a new version is emerging. On November 3rd Lloyds Banking Group (LBG), Britain’s biggest retail bank, said it would convert existing debt into about GBP7.5 billion ($12.3 billion) of “contingent core Tier-1 capital” (dubbed CoCos). This is a kind of debt that will automatically convert into shares if the bank’s cushion of equity capital falls below 5%. LBG is not the first bank to issue contingent capital, but it is the biggest to do so just as many regulators are looking at ways of giving banks access to equity when they need it and forcing creditors to share the pain of financial distress. ...
Europe's troubled banks: The muscles from Brussels
Thu, 05 Nov 2009 11:01:12 -0000
Decisive action on zombie banks from…the European CommissionNEELIE KROES has, according to one analyst in London, “cut through all the bullshit”. Europe’s competition commissioner has trod where national regulators dare not, by imposing harsh penalties on the banks that received the biggest bail-outs in Europe. On November 3rd Britain’s two monsters, Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG), got the treatment. In the preceding week ING, a Dutch insurance and banking conglomerate, surprised investors by announcing a break-up and a capital raising. Over the summer Germany’s Commerzbank and WestLB both agreed to tough penalties. Several more banks, including Dexia and KBC, both based in Belgium, and Germany’s Hypo Real Estate, are next in the commission’s line of fire.Ms Kroes is acting under a generous interpretation of her mandate. The objectives of reversing the damaging effects of state aid on competition and of ensuring that bailed-out firms have viable business plans are not controversial. But the commission’s apparent desire to address concerns over moral hazard by punishing firms that have been rescued by the state is much more provocative. National governments have so far done precious little to tackle this issue. That partly reflects their defence of national champions, but also a reluctance to start messing about with big banks while the supply of credit to the economy is still under threat and while they still need to raise more equity from private investors. ...
Restructuring banks: The living dead
Thu, 05 Nov 2009 11:01:12 -0000
Europe has raced ahead of America in dealing with its dud banks. But there is more work to be doneIN FILMS zombies are dealt with using anything from automatic weapons to kitchen implements. In banking few countries seem to have the guts to tackle their walking dead.An unlikely figure, however, is now waving a frying pan at them: Europe’s competition commissioner, Neelie Kroes. While national regulators debate the finer points of moral hazard, she has walloped some of Europe’s biggest recipients of state aid, including Royal Bank of Scotland (RBS), ING, Commerzbank and WestLB. Partly as the price for European Union approval of their bail-outs, and partly under their own steam, these banks are poised to shrink their balance-sheets dramatically—typically by 40% or more from the peak. More banks are expected to follow (see article). ...
Reshaping British banking: Putting competition first
Tue, 03 Nov 2009 06:53:10 -0000
Lloyds and Royal Bank of Scotland are forced to sell businessesAT THE height of the banking crisis, restoring financial stability was paramount for the British government. Worries about limiting the taxpayer’s exposure came second. Ensuring that banking customers continued to enjoy a competitive market was a distant third. Indeed, the government waived competition rules to let Lloyds TSB take over Halifax Bank of Scotland (HBOS), Britain’s biggest mortgage lender, in what proved to be a disastrous move for Lloyds, as the merged group then required a massive state bail-out. Now that the crisis has abated, fostering a competitive banking market is becoming more significant again, though mainly because of the intervention of Neelie Kroes, the European Union’s competition commissioner. Last week she forced ING, a rescued Dutch bank, to split its banking and insurance operations. She also imposed restrictions on lending and deposit-taking at Northern Rock, a nationalised mortgage lender which the British government is splitting into a “good” bank, to be privatised, and a “bad” part, to be wound down. ...
Reshaping British banking: Rock carving
Thu, 29 Oct 2009 11:53:57 -0000
Splitting Northern Rock is just the beginningNORTHERN ROCK was rescued in September 2007, more than a year before the much-bigger Royal Bank of Scotland (RBS), Lloyds TSB and HBOS. The mortgage bank may also be the first to wriggle out of government hands. On October 28th the European Commission approved a restructuring plan, as required under the European Union’s state-aid rules, splitting it into a good bank and a bad bank. The good bank will keep the retail deposits and some existing mortgages. The bad bank will take no deposits and look after the remaining assets. UK Financial Investments (UKFI), which manages the government’s shareholdings in RBS and Lloyds, will take over both bits after the split. The plan is to sell the good bank and gradually run down the assets of the bad one, making sure in the process that neither distorts competition. ...

World Bank/IMF

The IDB—50 Years, Zero Reflection

Who Will Determine the Future of Capitalism?

Norway finds Canada's largest publicly-traded company, Barrick Gold, unethical
Norway's Ministry of Finance announced Friday that it would exclude mining giant Barrick Gold and U.S. weapons producer Textron Inc from the country's pension fund for ethical reasons. This is an especially significant judgment for Canada, as Barrick Gold is currently Canada's largest publicly traded company.

ING Latest Press Releases

03/11/09 - ING agrees to sell three of its U.S. broker-dealers to Lightyear
Tue, 03 Nov 2009 08:04:00 +0100
ING announced today that it has reached an agreement to sell three of its U.S. independent retail broker-dealer units, which comprise three-quarters of ING Advisors Network, to Lightyear Capital LLC.
26/10/09 - ING to launch rights issue to repay half of State capital injection
Mon, 26 Oct 2009 07:00:00 +0100
ING announced today that it has reached an agreement with the Dutch State to alter the repayment terms of the Core Tier 1 securities issued in November 2008, in order to facilitate early repayment.
26/10/09 - ING to separate banking and insurance operations
Mon, 26 Oct 2009 07:00:00 +0100
ING announced today that it will move towards a complete separation of its banking and insurance operations as part of its ongoing review of the Group's strategy and as a logical next step in its Back to Basics programme
26/10/09 - ING to revise Management Boards in line with strategic direction
Mon, 26 Oct 2009 07:00:00 +0100
ING announced today that it will move towards a separation of its banking and insurance operations, clarifying the strategic direction for the bank and the insurance company going forward.
26/10/09 - ING announces preliminary third quarter 2009 results
Mon, 26 Oct 2009 07:00:00 +0100
ING announced that in connection with other announcements made today, it releases a limited set of preliminary and unaudited figures for the third quarter of 2009.
16/10/09 - ING to transfer its U.S. reinsurance business to RGA Inc.
Fri, 16 Oct 2009 08:30:00 +0200
ING announced today that it has reached an agreement to transfer its U.S. group reinsurance business, ING Reinsurance U.S., to Reinsurance Group of America, Inc. Terms of the agreement were not disclosed. RGA is a U.S.-based global provider of life reinsurance.

The Economist: The World Bank and the IMF

India's gold purchase: Adornment and investment
Thu, 05 Nov 2009 11:01:13 -0000
India is eager for the IMF’s bullionIF YOU count bangles, necklaces, anklets and other pieces of jewellery, India is the largest repository of gold in the world, according to the World Gold Council. Many Indians see gold as an investment as well as an adornment. India’s post office sells 24-carat gold coins, as small as 0.5 grams, to savers wary of fiat currencies or mutual funds. The latest big investor in the metal is the Reserve Bank of India (RBI). On November 3rd the central bank said it had bought 200 tonnes of gold from the IMF, a purchase that would have cost about $6.7 billion. The news pushed the price past $1,090 an ounce for the first time.The IMF’s gold holdings are less decorative than India’s, but also impressive: the third-biggest official stash in the world. Its sale to the RBI is part of a plan to offload 403.3 tonnes, or an eighth of its total. The proceeds will create an endowment to cover the fund’s operating expenses and help expand its lending. It is doing its best not to rock the market by selling first to central banks, in keeping with their agreement in August to sell no more than 2,000 tonnes over five years. But the gold market is now interested in how much central banks might buy, not how much they might sell. ...
The World Bank-IMF meetings: Money, votes and politics
Wed, 07 Oct 2009 07:39:57 -0000
Battles over money and power at the World Bank and IMF“WE ARE into the world of politics”, said the World Bank’s president, Robert Zoellick, at the two-day annual meetings of the World Bank and the International Monetary Fund, ending on Wednesday October 7th in Istanbul. Mr Zoellick was referring to the disagreements between richer and poorer countries over his institution’s pleas for more funding to cope with the aftermath of the financial crisis. But his statement held true for much of what went on at this year’s meetings. It was easy to reach broad agreement that it was too early for governments and central banks to begin winding down their big stimulus packages. But opinions diverged over the need to boost the funding of the world’s main financial institutions, and even more so when it came to discussing demands by big developing countries such as China and India for more voting power on their boards. ...
The role of emerging markets: Cosmetic surgery?
Thu, 01 Oct 2009 11:04:22 -0000
The face of global economic governance is changingSYMBOLISM or substance? The G20 meeting in Pittsburgh secured the place of emerging markets at the top table of global economic policy. “Bretton Woods is being overhauled before our eyes,” declared Robert Zoellick, head of the World Bank. The G20 leaders agreed to shift voting power substantially within the IMF towards “dynamic emerging markets and developing countries”, and endorsed similar reform at the World Bank. They also announced that the G20 itself will replace the G7, a rich-world club that will now concentrate mainly on security issues, as the primary forum for international economic co-operation. The Financial Stability Board, which is supposed to oversee the co-ordination of global financial regulation, has also expanded to include the G20’s emerging–market members. But how much clout the developing world will actually have remains unclear. ...

IEG

2009 Annual Review of Development Effectiveness: Achieving Sustainable Development
The global financial crisis has driven up demand for World Bank support to mitigate the effects of the crisis on the poor. At the same time, concern has intensified that every development dollar be used effectively and efficiently to meet development objectives. Although it has always been important for the Bank to demonstrate that its work is producing real results for people living in poverty, it is particularly critical to do so this year. The Annual Review of Development Effectiveness 2009 presents the World Bank’s record of performance in achieving outcomes from its projects and country programs and focuses on the Bank's contributions in supporting environmental sustainability.
Evaluation to Help Improve Development Results: A New Paper by the Director General of IEG
This new paper by IEG Director General Vinod Thomas addresses a twofold question on evaluation. First, it deals with the question of the "what" – the need for evaluation methods and institutional frameworks to respond to the growing uncertainties and complexity of development situations. The paper notes the lasting validity of some of the basics in evaluation, and the need to return to the basics. But it also suggests shifts needed to respond to emerging issues, such as growing interlinkages across sectors. Second, it discusses the "how." In particular, there are issues of capacity building, incentives, and organization that are necessary for an independent evaluation function to be effective within a country’s institutional architecture.
New Monitoring and Evaluation Resource: Mexico's M and E System: Scaling Up from the Sectoral to the National Level
This paper provides a brief review of Mexico's progressive movement from a sectoral to a governmentwide M and E system. It highlights the critical institutional reforms introduced, the policy decisions, and the most important operational steps that were taken, offering an account of the political context within which such changes and decisions were possible. The paper emphasizes the specific role of the National Council for the Evaluation of Social Policy (CONEVAL) as an innovative development, which furthered institutionalization of evaluation and a results focus at the federal government level through the implementation of the System for Performance Evaluation (SED). A quick review of the governmentwide system’s strengths and main challenges for the future is offered. Some lessons for other countries and conclusions follow.

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