Financial groups are entities that play a key role in the world of finance and business. They are often associated with large international corporations and banks, but their definition and role can be somewhat ambiguous to those unfamiliar with the financial sector. In this article, we will explore what a financial group ishow they work and what is their importance in the economic field.
Concept and definition of financial group
A financial group is an entity made up of financial institutions that operate together under the same organizational and strategic structure. These institutions can be banks, brokerage houses, insurance companies and other entities engaged in financial activities.
The definition of a financial group varies by jurisdiction. In some countries, reference is made to financial conglomerates, while in others the term is used ‘financial group’ more specifically.
In general, a financial group is made up of a parent company and its subsidiaries, all of which are oriented to financial activities. Regarding this, it is important to take into account that it is a financial stand-by, which permeates the subject in context.
Financial groups have a number of characteristics that distinguish them from other companies and organizations. First, they have a legal structure and complex organizational, given the number and variety of financial entities that comprise them. In addition, they often have a presence in multiple countries or regions of the world.
Second, because financial institutions have different roles and objectives, financial groups are often organized to take advantage of the synergies between them and optimize profitability and return for shareholders.
Third, financial groups are subject to regulation and supervision by government agencies, with the aim of protecting investors and avoiding activities considered risky or bad for the economy.
What is the objective of a financial group?
Financial groups are complex entities that encompass various financial institutions, such as banks, brokerage firms, and insurance companies, among others. Their role in the global economy is fundamental, since they allow the creation of financial products and services, the generation of employment and the promotion of economic growth.
In essence, a financial group aims to create value for its shareholders through a joint strategy to maximize its profitability. To achieve this, the financial groups engage in financial intermediation, that is, in attracting resources from savers and channeling them to productive sectors through the offer of credit and other financial products.
In addition, financial groups have a number of additional functions, such as risk management, conducting credit risk assessments and investing in financial assets that allow them to earn profits in international markets.
Another important objective of financial groups is compliance with government rules and regulations. These organisms supervise the operation of the groups in order to avoid practices that could be detrimental to the economy and to protect investors.
On the other hand, the objective of a financial group is to create value for its shareholders through a joint strategy to maximize their profitability, using financial intermediation, risk management and other financial resources. In addition, they must comply with government regulations to ensure the proper functioning of the economy and protect investors.
What laws regulate financial groups?
Due to their importance to the global economy and their ability to affect multiple sectors, these groupings are subject to a strict government regulation.
In Mexico, financial groups are subject to regulation by the National Banking and Securities Commission (CNBV). The CNBV is a government agency responsible for supervising financial institutions and guaranteeing the stability of the financial system. In particular, the Financial Groups Regularization, published in the Official Gazette of the Federation on December 29, 2017, sets the rules for registrationoperation and supervision of financial groups in Mexico.
In Spain, financial groups are regulated by the Law on the Regulation and Supervision of Private Insurance. This law establishes the solvency and capitalization requirements that insurance companies must meet, as well as investment restrictions. and the assets that financial groups may have.
In the United States, financial groups are regulated by a series of laws and regulations, such as the Securities Market Laws and the Dodd-Frank Wall Street Reform and Consumer Protection Act. These laws establish the rules for the offer of financial products, risk management, consumer protection and supervision of the activities of financial groups.
In other countries, such as the UK and Germany, financial pools are regulated by specific government agencies, as the Financial Conduct Authority in the UK and the Federal Financial Supervisory Authority in Germany. It can be studied through corporate law.
Examples of financial groups
Below, we present some examples of important financial groups in the world. These are the following:
- JPMorgan Chase & Co.. is one of the largest and most diversified financial groups in the world. They offer banking, investment and asset management services to clients around the world. The group is headquartered in New York and has more than 250,000 employees worldwide.
- HSBC Holdings plc is a multinational financial group headquartered in London, United Kingdom. They offer banking, insurance and asset management services to clients around the world. The group has a significant presence in Asia and has more than 235,000 employees worldwide.
- Goldman Sachs Group, Inc. is an American financial group headquartered in New York. They offer banking services, asset management, investment services, and loan services to clients around the world. The group is known for its strong presence on Wall Street and has more than 40,000 employees worldwide.
- Santander Bank is a Spanish financial group headquartered in Madrid. They offer banking, insurance and asset management services to clients around the world. The group has a significant presence in Latin America and has more than 200,000 employees worldwide.
- Deutsche Bank AG is a German financial group headquartered in Frankfurt. They offer banking, asset management, investment services, and loan services to clients around the world.
Banorte financial group
Banorte is one of the largest financial groups in Mexico, with a significant presence in the banking, insurance and pension sectors. Founded in 1899 In the city of Monterrey, Banorte has expanded nationwide and is known for its focus on customer service and its commitment to the economic and social development of the country.
Banorte operates throughout Mexico through an extensive network of branches, ATMs and digital channels, which allows it to serve the financial needs of a wide range of clients, from small businesses to large corporations. In addition, the group offers investment banking, securities brokerage and asset management services through its subsidiaries, Banorte-Ixe and Banorte Brokerage Houserespectively.
One of Banorte’s main objectives is to promote economic and social growth in Mexico through investment and financing projects for companies and infrastructure projects. For example, in 2019, the company participated in a solar energy financing project in the state of Sonora, which that allowed the development of renewable energy and the reduction of greenhouse gas emissions.
Banxico Financial Group
Banxico is the Central Bank of Mexico, and is responsible for controlling the money supply, guaranteeing financial stability, and regulating the country’s financial system. It is one of the most important institutions in Mexico and its function It is essential for the country’s economy.
Banco de México was founded in 1925, and its main objective is to maintain monetary and financial stability. To meet this objective, Banco de México controls the money supply, inflation, and sets the interest rate. These decisions have a great impact on the Mexican economy, and are fundamental to guarantee the financial stability of the country.
Banxico is also responsible for regulating and supervising Mexico’s financial system. This includes supervision of commercial banks and other financial institutions, as well as ensuring that the financial system is run in a transparent and fair manner. In addition, Banxico works with other international financial institutions to ensure that the financial regulation of Mexico be in line with international standards.
Since its founding, Banxico has become a highly respected institution, both nationally and internationally. It is a member of the Latin American Network of Central Banks, and has been recognized for its commitment to the transparency and accountability.
Another important aspect of Banxico’s work today is its focus on technological innovation in the financial sector. Banco de México has become a leader in experimentation with new financial technologies and digital payment methods. Banxico is also leading the development of regulatory policies that allow the adoption of new financial technologies, while maintaining the highest standards of security and protection of Mexican consumers.
State financial group
State Financial Group is a term that refers to a group of financial entities that are owned and controlled by a state government. These financial groups are common in various countries around the world, and their main function is to provide financial services to the citizens and companies of the state in question.
The main advantage of having a state financial group is that it can provide access to financial services to people who might otherwise have difficulty obtaining them. This is especially true in more rural or remote areas, where affordable and reliable financial services can be difficult to find. In these situations, a state financial group can provide a safe and convenient option.
Another advantage of state financial groups is that they may have a stake in the financial stability of their state, which can lead to conservative financial and banking policies. This can be beneficial for customers and businesses, since it offers greater security and financial stability.
GOB financial group
In this case, the financial groups are made up of two financial entities and a Holding Company. In addition to that, only those who this society can belong is responsible for evaluating and authorizing.
In the Register of Entities are all the financial groups that operate in Mexico to date, each one of them has specific and complex characteristics, that are responsible for differentiating each of these.