What Are Bank Holding Companies?

Bank holding company, referred to as BHC, is one of the US financial systems and refers to a company that controls one or more banks or other bank holding companies. Prior to 1969, the main purpose of banks to form holding companies was to break the restrictions on interstate branches. After 1969, due to credit crunch, market interest rates increased, and banks' sources of funding decreased, the holding company issued commercial bank promissory notes and used the funds to engage in bank lending activities, and to integrate itself and various non-bank affiliates. Assets, making liability management more scalable. The issuance of such promissory notes increased fairly quickly in the early days. However, in October 1970, the relevant financial authorities stipulated in order to prevent banks from using holding companies to enter traditionally non-banking areas and to prevent the generation of monopoly power of banks. Such funds must pay deposit reserves, resulting in a serious setback in their issuance balance, which did not resume growth until 1973, and formed a three-nation situation with Rongtong and non-financial companies. ^[1]

Bank holding company

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Bank holding company, referred to as BHC, is one of the US financial systems and refers to a company that controls one or more banks or other bank holding companies. Prior to 1969, the main purpose of banks to form holding companies was to break the restrictions on interstate branches. After 1969, due to credit crunch, market interest rates increased, and banks' sources of funding decreased, the holding company issued commercial bank promissory notes and used the funds to engage in bank lending activities, and to integrate itself and various non-bank affiliates. Assets, making liability management more scalable. The issuance of such promissory notes increased fairly quickly in the early days. However, in October 1970, the relevant financial authorities stipulated in order to prevent banks from using holding companies to enter traditionally non-banking areas and to prevent the generation of monopoly power of banks. Such funds must pay deposit reserves, resulting in a serious setback in their issuance balance, which did not resume growth until 1973, and formed a three-nation situation with Rongtong and non-financial companies. ^[1]

A company that controls only one bank's stock is called "a bank holding company"; a company that controls more than one bank's stock is called "multi-bank holding company".

Bank holding company (English: bankholding company), is a financial holding company (referred to as financial control). After the economic panic, the US-based inter-bank banking firewall mechanism established by US-based banks was uncompetitive under the strong competition of European-style integrated banks. Therefore, under the market-oriented requirements of the department store in the financial industry, in the 1980s In the United States in the 1950s, banking holding companies were used to operate different financial industries.

Financial holding companies conduct cross-industry integration of the financial industry through indirect methods. A financial holding company cannot directly engage in financial business or other business, but the scope of its investment holding includes banking, ticket finance, credit card, trust, insurance, securities, futures, venture capital, Foreign financial institutions, etc.

The various related companies of Financial Control can use this close connection to break through the barriers of the previous financial division and sell insurance, securities, bonds, and credit cards on the same marketing channel through the cross-selling of financial holding companies And other financial products, and thereby improve the efficiency of each financial control subsidiary's services to customers, thereby reducing the cost of management and marketing expenses, improve competitiveness, and provide "one-stop purchase, one stop to the end" comprehensive financial services.

A bank holding company, also known as a group banking system, is an organization that is funded by a group to set up an equity company, and then the company controls two or more banks through acquisitions, etc. The equity company's operating policies and business activities control bank operations. . It has more than 25% of the voting power.