View Full Version : "Banc" of America?? Calling all Bancers, now's your chance to explain.
Spectre of Pithecanthropus
03-28-2001, 10:59 AM
Is there any good reason why banks are starting to style themselves "Bancs"? I asked the last time I was in my branch, and they told me Banc Of America was their investment division. More recently I noticed that "Deutsche Banc" was doing it as well. Whether they do it for a particular division, or the entire outfit, why on earth are they doing this? To distract us from increasing checking account fees?
03-28-2001, 12:03 PM
WARNING: THIS POST IS DELIBERATELY SPELLED WRONG
I dont nowe y, but Im al in favor of any efort to moderniz the speling of English. :)
03-28-2001, 12:22 PM
Banc, which is the French spelling, adds a certain cosmopolitan distinction, and could have the advantage of being more recognizable in other countries.
I find it slightly less affected than antique stores which use the word "Shoppe."
03-28-2001, 12:50 PM
In the United States, the term "Banc" in the corporate title usually means a wholly owned subsidiary of the bank. The Glass-Stagall act put into place during the depression limits the ways a bank can do business. Certain lines of business, like investments and mortgages, cannot be operated directly by a bank. The name Bank of America, for instance, is the name of the holding company which owns all of the lines of business. Branches usually take the name of the holding company. The bank holding company can own mortgage companies, investment companies, etc., but the bank itself can not. So you end up with a holding company and a slew of subsidiaries.
It makes much less sense in today's economy than in the 1930's, but the law remains.
kunilou - funny.
03-28-2001, 01:31 PM
[securities lawyer hat on] More specifically, "Banc" denominated subsidiaries are those that deal in securities, particularly investment banks. The Glass-Steagall Act forced banks to choice between commercial banking (business lending, e.g. J. P. Morgan) and investment banking (underwriting securities, e.g. Morgan Stanley). Beginning in the late 70s, the regulators decided to permit commercial banks-with-a-k to create holding corporations that could engage in investment banking. The "c" was deemed sufficient to alert the unwary that the entity they were dealing with wasn't really a commercial bank, but a special investment-banking subsidiary of a nonbank holding company, one of whose other affiliates was a commercial bank. (Got that?)
It was all hugely artificial - a product of Congress's generation-long inability to kill Glass-Steagall. With the passage of Gramm-Leach-Bliley in late 1999, most of this artifice is gone - banks can now engage fully in both commercial and investment banking, and can own insurers (viz. Citigroup, which when it formed took the risk of that its very structure would be illegal).
Glass-Steagal is considered one of the two great monstrosities arising from the depression - nitwit congresstwerps decided that diversification was a bad way to protect the nation's financial industry. (Of course, the fact that it served as a life-support system for small-town banks and insurance agents had nothing to do with the law's passage.)
The other monstrosity? Well, that would be the notorious Smoot-Hawley beggar-thy-neighbor tariff regime, which turned an ordinary business downturn into a catastrophic, global deflationary spiral. But that's another day....[securities lawyer hat OFF]
03-28-2001, 01:46 PM
present ppl: choicing
past ppl: choiced
usage: Confined largely to New Choicey.
Oh, and I love "took the risk of that."
Y'know, maybe I should get one of those webpage readers for the blind. Maybe I'll be able to hear the mistakes I can't see.
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