Depending on where in the world a bank is owned, that ownership is determined in part by regulatory laws. In the United States legislative acts such as the Bank Holding Company Act of 1956 and Gramm-Leach-Bliley Act of 1999 influence allowable bank ownership structure. Several kinds of bank ownership types exist.
• Bank Holding Company
A bank holding company may be owned by a combination of shareholders and/or companies. Bank holding company’s themselves own multiple banks, hence the term bank holding company. Examples of bank holding company’s are Bank of America, HSBC North America and Goldman Sachs.
Foundations are financial entities that provide cash flow for organizations that may include some types of banks. For example, the Bill and Melinda Gates Foundation provides banking services for underprivileged groups also known as micro credit. Foundations can also own hedge funds that are considered custodial banks in the sense they don’t provide traditional banking services.
• Central banks
Central banks such as the U.S. Federal Reserve Bank have unique ownership structures with strict ownership criteria. In the case of the Federal Reserve Bank, member banks within the Federal Reserve System own it. These shares yield a fixed six percent per year return and the banks structure and authority is derived from legislative decision making. The ownership of the Federal Reserve Bank is non-negotiable meaning it is pre-determined.
• Private owned
Private owned banks are the kind of banks owned by venture capitalists, partnerships, and limited liability corporations. Ownership of these banks is not open to anyone but private shareholders thereby restricting managerial intervention via selective decision making. These types of banks may provide specific financial services such as offshore banking. Examples of banks providing banking
• Public banks
Public banks may also be bank holding companies and have ownership shares available to the public. Shareholders determine the Board of Directors for these banks and activities and financial statements pertaining to the company is public information. For example, in the United States, public banks such as Bank of America are required by law to register financial documents with the Securities and Exchange Commission.
• Government banks
Government banks are owned by the government and may include government subsidized financial institutions that provide nationalized banking services. Fannie Mae and Freddie Mac are examples of government chartered public banks that were nationalized in 2008 for the purpose of economic stability. Depending on the political and economic structure of a country, governments involvement in banking may be limited are extensive.
• Community banks
A kind of bank that is owned by a community is a credit union. Credit Unions are federally regulated financial institutions that are owned by members and not the public. This means the credit union directly serves the interests of those individuals to whom banking services are provided. On a larger scale, the World Bank is also a community bank in the sense it is owned and serves a cooperative community of 187 member countries rather than corporations or individuals around the world.
1. http://bit.ly/9LDvUP (Federal Deposit Insurance Corporation)
2. http://bit.ly/15btOH (Federal Reserve Bank)
3. http://bit.ly/9cmFo8 (World Bank)
4. http://bit.ly/18xYna (Federal Financial Institutions Examination Council)
5. http://bit.ly/9EP39B (Alston & Bird LLP)