Eco/372

Industry Overview

ECO372

September 12, 2011

Gregory Czar

Industry Overview

The history of the banking industry began to rise in the industrial hierarchy at the beginning of the twentieth century (1896-mid1970s) which was initiated by the change in industrial setting, by the second half of the of the twentieth century the banking industry governed the larger of industrial organizations. Reason for the domination of this organization is because they were able to form at different locations (Ingram and Rao, 2004) and with the new technology that gave the backing for effective coordination for those locations along with the companies’ headquarters. Ownership of United States banks are privately owned, there are no banks that are owned by the government. A bank’s stock is held by a large numbers of investors, therefore a bank will have multiple owners.

The role of the banking industry in the economy is to facilitate borrowing, lending, and payments. The risk management in banking in issuing financial assets that permits firms to share the risk, as well as to provide guarantee and a line of credit. There are financial intermediaries that include Commercial Banks, Savings and Loan Associations (S&L), and Credit Unions (www.uwec.edu/carrolwd/classes/vietnam2007). Since the mid1970s electronic banking conceptualized but did not advance until the late 1990s when the Internet evolved. By the year 2000, approximately 80 percent of United States banks advanced in the use of e-banking. For example in 2001, Bank of America became the first financial institute to reach three million online banking customers, more than 20 percent of its customer base (Batchelor, 2011). The banking industry has since shifted to a negative position in the recent years due to the decline in the stability of the economy.

In this paper the following will be discussed, an industry overview, Strengths, Weakness, Opportunities, Threats, and Trends (SWOTT) analysis of the banking...