BankManagement银行管理复习.docx

BankManagement银行管理复习.docx

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BankManagement银行管理复习

BANKMANAGEMENT

Chapter1FundamentalForcesofChangeinBanking

P2.

TheGlass-SteagallActwhichcreatedthreeseparateindustries:

commercialbanking,investmentbanking,andinsurance.

TheBankHoldingActdeterminedactivitiescloselyrelatedtobankingandlimitedthescopeofactivitiesacompanycouldengageinifitownedabank.

TheMcFaddenActlimitedthegeographicmarketofbankingbyallowingindividualstatestodeterminetheextenttowhichabankcouldbranchintra-orinter-state.

Asaresultoftheseacts,theUnitedStatesdevelopedauniquebankingsystemwhichhada

largenumberofsmallerbanks;limitedinthescopeofproductsandservicesoffered;andlimitedinthegeographicareascoveredbybanks.

P4.

TheGlass-SteagallActandBankHoldingActeffectivelyrestrictedtheactivitiesofabanktothosecloselyrelatedtobankingasdefinedbyFederalReserve.

Thisstructuralchangeisfrequentlyattributedtoderegulationofthefinancialservicesindustry.Deregulationwasanaturalresponsetoincreasedcompetitionbetweendepositoryinstitutionsandnondepositoryfinancialfirms,andbetweenthesametypeofcompetitorsacrossworldmarkets.

Gramm-Leach-BilleyAct,alsoknownasFinancialModernizationAct,whichmadeitpossibleforbankstocreateafinancialholdingcompanywhichcouldofferinvestmentbanking,insurance,andotheroncedisallowedproductsandservices.

P5.

Fivefundamentalforceshavetransformedthefinancialservicesmarket:

1.Deregulation/re-regulation

2.Financialinnovation

3.Securitization

4.Globalization

5.Advancesintechnology.

Thelatterfactorsactuallyrepresentresponsestoderegulationandre-regulation.

P8-p9.

Commercialpaper

Unpledged,short-term,basedoncredit.

Highqualitycorporateborrowershavealwayshadtheoptiontoissuecommercialpaper.

Junkbonds

Advantages:

accesstolargeramountoffunds,longer-termfinancing,andfewerrestrictivecovenants.

It'ssuitableformedium-sizedcompaniesrepresentinglower-qualityborrowers.

P20.Securitization

Securitizationistheprocessofconvertingassetsintomarketablesecurities.

1.Itenablesbankstomoveassetsoff-balancesheetandincreasefeeincome.

2.Itincreasescompetitionforstandardizedproductssuchas:

mortgagesandothercredit-scoredloans.

3.Eventuallylowersthepricespaidbyconsumersbyincreasingthesupplyandliquidityoftheseproducts.

P22.

Theobjectivesbehindsecuritizationincludethefollowing:

1.Freecapitalforotheruses

2.ImproveROEviaservicingincome

3.Diversifycreditrisk

4.Obtainnewsourcesofliquidity

5.Reduceinterestraterisk

Chapter2AnalyzingBankPerformance

P35.

Accountingforsecurities

Atpurchase,mustdesignatetheobjectivebehindbuyinginvestmentsecuritiesaseither:

1.held-to-maturitysecuritiesarerecordedonthebalancesheetatamortizedcost.

2.tradingaccountsecuritiesareactivelyboughtandsold,sothebankmarksthesecuritiestomarket（reportsthematcurrentmarketvalue）onthebalancesheetandreportsunrealizedgainsandlossesontheincomestatement.

3.available-for-sale,allotherinvestmentsecurities,arerecordedatmarketvalueonthebalancesheetwithacorrespondingchangetostockholderseq'uityasunrealizedgainsandlossesonsecuritiesholdings.

P36,37

Demanddepositsaretransactionsaccountsthatpaynointerest.

NOWs,ATSaccounts:

payinterestsetbyeachbankwithoutfederalrestrictions.NOWsareavailableonlytononcommercialcustomers.

BrokereddepositstypicallyreferstojumboCDsthatabankobtainsthroughabrokeragehousethatmarketstheCDstoitscustomers.

Coredepositsarestabledepositsthatarenothighlyinterestrate-sensitive.

Coredepositsinclude:

demanddeposits,NOWaccounts,MMDAs,andsmalltimedeposits.

Volatileliabilitiesornetnon-coreliabilitiesinclude:

jumboCDs（over100,000）,depositsinforeignoffices,federalfundspurchased,repurchaseagreements,andotherborrowingswithmaturitieslessthanoneyear.

P39,42

NII=II-IE

Burden=OE-OI

EFF=OE/（NII+OI）

NI=NII-Burden-PLL+SG-T

II:

interestincome,IE:

interestexpense,NII:

netinterestincome,OI:

noninterestincome,

OE:

noninterestexpense,EFF:

efficiencyratio,PLL:

provisionsforloanlosses,

SG:

securitieslosses,T:

taxes

Interestincomeisthesumofinterestandfeesearnedonallofabank'sassets,including:

Loans,Depositsheldatotherinstitutions,Municipalandtaxablesecurities,investmentandtradingaccountsecurities,rentalreceiptsfromleasefinancing.

Interestexpenseisthesumofinterestpaidonallinterest-bearingliabilities,including:

transactionsaccounts（NOWs,ATSandMMDA）,timeandsavingsdeposits,short-termnoncoreliabilities,andIong-termdebt.

Noninterestincome:

trustorfiduciaryincome,feesanddepositservicecharges,tradingrevenues,otherforeigntransactionsandothernoninterestincome.

Noninterestexpenseiscomposedprimarilyof:

1.Personnelexpense:

salariesandfringebenefitspaidtobankemployees,

2.Occupancyexpense:

rentanddepreciationonequipmentandpremises,and

3.Otheroperatingexpenses:

utilitiesanddepositinsuraneepremiums.

P45

BankPerformaneeModel

P46-P48

Returnonequity（ROE=NI/TE）

ROEiscomposedoftwoparts:

ReturnonAssets（ROA=NI/TA）;EquityMultiplier（EM=TA/TE）,

ROE=ROAEM

NI=Totalrevenue（TR）－Totaloperatingexpense（EXP）－TaxesROA=NI/aTA=TR/aTA－EXP/aTA－Taxes/aTA

P48,49

Rateeffectssuggestthattheinterestcostperliability,whichindicatestheaveragecostoffinancingassets,maydifferbetweenbanks.

Composition（mix）effectssuggestthatthemixofliabilitiesmaydiffer.

Volumeeffectsrecognizethatabankmaypaymoreorlessininterestexpensesimplybecauseitoperateswithdifferentamountofinterest-bearingdebtandequityand,thus,paysinterestonadifferentamountofliabilities.

P50,51

Earningsbase（EB）=Averageearningassets/aTA

Earningassetsincludeallassetsthatgenerateexplicitinterestincomeplusleasereceipts.Itcanbemeasuredmosteasilybysubtractingallnonearningassets,suchasnoninterestcashandduefrombanks,acceptances,premises,andotherassets,fromtotalassets.

Netinterestmargin:

NIM=NII/earningassets（EA）

Spread=（intinc/EA）-（intexp/intbear.Liab.）

Burdenratio=（Noninterestexp.-Noninterestincome）/aTA

Efficiencyratio=Nonint.Exp./（Netint.Inc.+Nonint.Inc.）

P52

TheFederalReserveBoardhasidentifiedsixtypesofrisk:

1.Creditrisk

2.Liquidityrisk

3.Marketrisk

4.Operationalrisk

5.Capitalorsolvencyrisk

6.Legalrisk

7.Reputationalrisk

P55

Past-dueloansrepresentsloansforwhichcontractedinterestandprinciplepaymentshavenotbeenmadebutarestillaccruinginterest.Pastdueareoftenseparatedinto30-89dayspastdueand90daysandoverpastduedate.

Nonperformingloansisloansthataremorethan90dayspastdue.

Nonaccrualloansarethosenotcurrentlyaccruinginterest.Theseloansarecurrently-orhavebeenhabitually-pastdue,orhaveotherproblems,whichhaveplacedtheninnonaccrualstatus.

Totalnoncurrentloansarethesumofthesetwotypesofloans.

Restructuredloansareloansforwhichthelenderhasmodifiedtherequiredpaymentsonprincipalorinterest.Thelendermayhavelengthenedmaturityand/orrenegotiatedtheinterestrate.

Classifiedloansaregeneralcategoryofloansinwhichhaveregulatorshaveforcedmanagementtosetasidereservesforclearlyrecognizedlosses.

P72

Camelsratings

C=capitaladequacy

A=assetquality

M=managementquality

E=earnings

L=liquidity

S=sensitivitytomarketrisk

Chapter3ManagingNoninterestIncomeandNoninterestExpense

P89

Keyratios:

Burden=nonint.exp.－nonint.inc.,

Netoverheadexpense=burden/totalassets,

Efficiencyratio=nonint.Exp.（netint.inc.+nonint.inc.）

Operatingriskratios:

Operatingriskratio=（Noninterestexpense－Feeincome）/Netinterestmargin

Someanalystsfocusonabank'soperatingriskratioinordertodifferentiateperformanceattributabletocostcontrolsversusfeegeneration.

Theloweristheoperatingriskratio,thebetteristhebank'soperatingper.foBremcanucseit

generatesproportionatelymoreofitsrevenuesfromfees,whicharemorestableandthusmorevaluable.

Productivityratiosindicatehowefficientlybanksareusingtheiremployeesrelativetocapitalassets.

Twocommonlycitedratiosare:

1.Assetsperfulltimeemployee=Averageassets/Numberoffull-timeemployees

2.Averagepersonnelexpense=Personalexpense/Numberoffull-timeemployees

Themoreproductivebanktypicallyhasfeweremployeesperdollarofassetsheldandoftencontrolspersonnelexpenseperemployeebetter.

Thesecondratioisoftenhighforhighperformancebanksbecausetheyoperatewithfewerpeoplebutpaythemmore.

Communitybanksalsotypicallyexaminetwoadditionalratios,becauseloanstypicallyrepresentthelargestassetholding,itismeaningfultocalculatealoans-per-employeeratioasanindicatorofloanproductivity.

Sinceloansareoftenasthelargestassetheld,communitybanksexamine:

Loansperfulltimeemployee=Averageloans/Numberoffull-timeemployees

Aratioofnetincomeperemployeegenerallyindicatestheproductivityandprofitabilityofabank'sworkforce:

Netincomeperemployee=Netincome/Numberoffull-timeemployees

p96

Strategiestomanagenoninterestexpense

Fourdifferentstrategiesare:

1.expensereduction,

2.increaseoperatingefficiency,

3.changingproductpricing

4.pursuingcontributiongrowthwherebynoninterestrevenuesrisebymorethannoninterestexpense.

expensereduction:

Manybanksbegincostmanag