Q3. In thrift banks in USA, the structure of income has been changed because the intermediation...

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Q3. In thrift banks in USA, the structure of income has beenchanged because the intermediation role is no longer the mainsource of income, discuss this statement and explain the structureof income of banks in Saudi Arabia. Accounting for FinancialInstitution

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THE CHANGING STRUCTURE OF BANKS INCOME 1The evolution of financial systems The changes in banking and its income structure are a part of wider evolutionary changes in the financial system as a whole While financial systems appear to move more or less slowly through the phases and may pause at one stage for decades a broad form of evolution is nonetheless widely apparent and appears to be accelerating owing to technological change deregulation and the increased scope of cross border financial activity affecting previously segmented financial systems 2 Data issues The data sets used in this study are twofold First we employ the OECD data on bank profitability OECD 1997 These data provide information on financial statements of banks in 28 OECD countries for 197995 although for some countries the time series are shorter see Table 5 Banks are defined broadly as institutions primarily taking deposits from the public and providing finance for a wide range of purposes The data cover both balance sheets of banking sectors and the corresponding income and expenditure accounts Note that the data are at a macroeconomic or sectoral level and do not give any information on individual banks They cannot be used systematically to assess how behavior varies across sizes of institution although subsectors are provided for some countries In this paper we focus largely on the national patterns given by the sector all See Answer

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