Important Concepts in Chapter 11 This is a big chapter. It has a lot of information. It covers everything that will be covered in the chapters ahead. Roles of intermediaries, adverse selection, moral hazard, asymmetric information, economies of scale, regulation Q, financial disintermediation, money market mutual fund, savings and loan crisis, commercial paper markets, defined benefit and contribution plans (also in chapter 13), credit risk, interest rate risk (also in chapter 12), assets and liabilities of depository and nondepository institutions. Important Concepts in Chapter 12 Understanding fundamentals of bank management Asset: major assets and their trends, Liability: major liabilities and their trends, Equity, Bank profitability, Calculation of ROA, ROE, NII NIM, Bank Risks: Leverage, credit, interest rate, trading and liquidity Trends in Bank management Consolidation: Understanding the provision of McFadden Act, why and how it was repealed, Economics of consolidation, economies of scale, economies of scope, Empirical evidence, reason for consolidation. Nontraditional banking: Understanding the provision of Glass-Steagall Act, why and how it was repealed, section 20 affiliates, off-balance sheet activities Globalization: expansion of US banks abroad, Eurodollar, Eurobond, IBF Stop at subprime mortgage crisis. Important Concepts in Chapter 13 Life insurance: whole, term and universal, how do they differ? Pension fund: defined benefit and contribution. How do they differ? Vesting, Funding, ERISA, PBGC Mutual fund: open end, closed end, NAV, load and no-load fund Finance company, LBO, bootstrap financing, insights of Michael Milken Dealers and brokers: how do they differ? Investment banks Venture capital, mezzanine debt fund: their roles and how do they differ? Convertible debt, subordinate debt Gramm Leach Bliley Act Universal banking