Read the text and answer the questions. Private banks are banks that are not incorporated

Private banks are banks that are not incorporated. A non-incorporated bank is owned by either an individual or a general partner. In any such case, the creditors can look to both the “entirety of the bank’s assets” as well as the entirety of the sole-proprietor’s/general-partners’ assets.

These banks have a long tradition in Switzerland, dating back to at least the revocation of the Edict of Nantes (1685). However most have now become incorporated companies, so the term is rarely true anymore. There are relatively few private banks remaining in the US; but there are a few such as Brown Brothers Harriman & Co., which is a general partnership with about 30 members. This is also true of private banks abroad, Reputable old banks like Hettinger & Cie are truly hard to find.

“Private banks” and “private banking” can also refer to non-government owned banks in general in contrast to government-owned (or nationalized) banks, which were prevalent in communist, socialist and some social democratic (“liberal”) states in the 20th century. Private banks as a form of organization should also not to be confused with “Private banks” that offer financial services to high net worth individuals and others.

An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:

· greater privacy

· low or no taxation

· easy access

· protection against local political or financial instability

While the term originates from the Channel Islands being “offshore” from the United Kingdom, and most offshore banks are located in island nations to this day, the term is used figuratively to refer to such banks regardless of location, including Swiss banks and those of other landlocked nations such as Luxembourg and Andorra.

Offshore banking has often been associated with the underground economy and organized crime, via tax evasion and money laundering; however, legally, offshore banking doesn’t prevent assets from being subject to personal income tax on interest. Except for certain persons who meet fairly complex requirements, the personal income tax, for example, are required to declare on penalty of perjury, any offshore bank accounts – they may have.

An ethical bank, also known as social, alternative, civic, or sustainable bank, is a bank concerned with the social and environmental impacts of its investments and loans. Ethical banks are part of a larger societal movement toward more social and environmental responsibility in the financial sector. This movement includes: ethical investment, socially responsible investment, corporate social responsibility, and is also related to such movements as the fair trade movement, ethical consumerism, boycotting, etc. Ethical banking is a juvenile sector within this movement. Other areas, such as fair trade, have comprehensive codes and regulations that all industries that wish to be certified, as fair trade, must adhere to.

Ethical banking has not developed to this point; because of this it is difficult to create a concrete definition distinguishing exactly what it is that sets an ethical bank apart from conventional banks. Ethical banks are regulated by the same authorities as traditional banks and have to abide by the same rules.

A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. After the Great Depression, the US Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under US law, some use the term “commercial bank” to refer to a bank or division of a bank primarily dealing with deposits and loans from corporations or large businesses. In some other jurisdictions, the strict separation of investment and commercial never applied. Commercial banking may also been as distinct from retail banking, which involves the provision of financial services direct to consumers. Many banks offer both commercial and retail banking services.

1. What have you learned about private banks?

2. What advantages do offshore banks provide?

3. Where are most offshore banks located?

4. What movements do ethical banks include?

5. What is the difference between commercial and retail banking?

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