Compare and constract the functions and activities of a commercial bank with the central bank of Russian for example or another county. The first question is what are the 2 main functions of the 2 banks?
Since there is room to look into other international banks for this question, I suggest that you look into the Central Bank of Canada and compare it to the Banking Institution of the United States. The reason is that recent news showed the vast difference that exists between the two in terms of services, perceptions, and customer service. The conclusion of the research is that, compared to the United States, the Central Bank of Canada is 100% FOR the customer, is not there to take from the customers but to provide for them, and truly wants your business by ensuring fair and honest best practices. That does not seem to be the case with banking in the USA. As recently as September of 2013, the Canadian Bank Association (CBA) reported publically these amazing facts:
- 86 per cent of Canadians have a favorable impression of banks in Canada, with 94 per cent having a favorable impression of their own bank.
- 87 per cent of Canadians give banks a good performance rating when it comes to being stable and secure.
- 82 per cent of Canadians believe that a profitable banking sector is a healthy thing for the economy as a whole.
Hence, let's explore the functions. According to CBA, two main functions of Canadian Banking include:
- to keep inflation near 2 per cent — the mid-point of a 1 to 3 per cent target range via their monetary control framework
- influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate.
With those two key functions in place, the CBA obviously elicits the trust of their clients because they are clearly watching out for their best interests. With an 86% approval and a 94% favorable impression, it is clear that the CBA has no significant flaws in operation and is doing what it has committed itself to do. This is perhaps why their motto is
We are Canada's central bank.We work to preserve the value of money by keeping inflation low and stable.
This, comes to a direct contrast to them the current practices that take place in the United States banking world. According to their mission, BofA:
mak[es]decisions that are clear, fair, and grounded in the principles of shared success... and community building
connect[s]..customers and clients to the financial solutions they need.
The problem is that, according to news as late as 2011 but which still resonate today,
failed to tell shareholders voting on the acquisition of Merrill Lynch that it had already approved $5.8 billion in bonuses for Merrill executives. The bank later paid a $33 million fine for doing this.
Bank of America ranked lowest in a 24-bank survey of small business customer satisfaction from J.D. Power and Associates.
The problem with the BofA statistics is that they are even remotely possible. How can the central trust, or any trust (as the word entails T-R-U-S-T) play with the hard-earned money of its clients for the sake of awarding top-dollar rewards to some executives. It is basically as if American Banking were a pyramid business rather than a central depository where the money of the people is placed so that it can be used to its utmost.
With other American banking shaming events such as Fannie Mae, Freddie Mac, the number of "bailouts" that this administration has vouched for, plus the ongoing scandals regarding top excutive bankers (remember the one with the $24,000 shower curtain?), there is no doubt that the American banking system may be ruining, rather than saving, our country.