Key Concepts
1. Before discussing the chapter, emphasize the shift from a market orientation to a focus on particular
financial institutions.
2. Explain how each type of financial institution may now be part of a financial conglomerate.
3. Identify the main sources of bank funds, and elaborate where necessary.
4. Identify the main uses of bank funds, and elaborate where necessary.
POINT/COUNTER-POINT:
Should Banks Engage in Other Financial Services Besides Banking?
POINT: No. Banks should focus on what they do best.
COUNTER-POINT: Yes. Banks should increase their value by engaging in other services. They can
appeal to customers who want to have all their financial services provided by one financial institution.
WHO IS CORRECT? Use the Internet to learn more about this issue and then formulate your own
opinion.
ANSWER: Many banks have expanded their services by acquiring other types of financial institutions
that can provide the services. However, they sometimes pay too much for the institutions that can offer
these services. In general, offering additional services can be beneficial if the bank does not incur
excessive costs from offering these services.