The Banking Industry: Commercial Banking and Regulatory Agencies and the Federal Reserve System
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This paper is based on my experience working at National City this past summer. I worked extensively in the commercial credit department. In this role I gained experience working as both a credit analyst and as part of a lending team. This paper is a combination of that experience and research I have done on bank regulatory agencies, in particular the Federal Reserve and its function. The first section of this paper will attempt to provide a vivid description of the loan making process. It will examine specifically the role of both the lender and the credit department in the loan process. It will offer some insight as to what needs to be done for a loan to be approved and how the responsibilities are divided among the lender and the analyst. The second section of this paper will focus on bank regulatory agencies. This section will offer only a brief description of the several different regulatory institutions, but will offer an in depth look at the central bank system or the Federal Reserve. The many functions of the Fed will be discussed culminating in the role of the Fed in the banking industry today. The goal of this paper is to describe two integral components of the commercial banking system. It offers a look at both the internal and external sides of the industry. The description of the loan making process will show the inside of a commercial bank and how it accomplishes its goals. The description of regulatory agencies will offer a look at how the central bank affects the banking industry and how it uses its tools to accomplish its goals today.