ARE BANK LOAN RATINGS RELEVANT? Moreover, the coefficient on the
background index across MSAs1.58 in Column C, and slightly higher in later columnsis
nearly identical to that found within MSAs (Table 1.4, Column A). This is consistent with
the claim that both coefficients measure primarily the peer effect (γ ), which might be the
same across MSAs as within, rather than effectiveness sorting (θ ), which we would expect
to see within but not across MSAs.
On April 6, 1998, the creation of Citigroup through the combination of
Citicorp and Travelers Inc. was announced to the general applause of
analysts and financial pundits. The “merger of equals” created the world’s
largest financial services firm—largest in market value, product range,
and geographic scope. Management claimed that strict attention to the
use of capital and rigorous control of costs (a Travelers specialty) could
be combined with Citicorp’s uniquely global footprint and retail banking
franchise to produce uncommonly good revenue and cost synergies.
What is investment banking? Is it investing? Is it banking? Really, it is
neither. Investment banking, or I-banking, as it is often called, is the term
used to describe the business of raising capital for companies and advising
them on financing ...
General scanners have a broad list of attributes in mind and spend a minimal
amount of time matching resumes to their criteria. Usually, they start by doing
a quick scan, looking for the obvious scoop on the person: Did he go to a top
school? Has she worked for good companies? What functional knowledge does
he have? It’s best if this information is prominent and comes immediately to
the eye. If they like what they see, then they’ll read through the entire resume.
This approach is fairly typical of the way an investment banking team...
What is investment banking? Is it investing? Is it banking? Really, it is neither. Investment banking, or I-banking, as it is often called, is the term used to describe the business of raising capital for companies and advising them on financing and merger alternatives. Capital essentially means money. Companies need cash in order to grow and expand their businesses; investment banks sell securities to public investors in order to raise this cash. These securities can come in the form of stocks or bonds, which we will discuss in depth later....
With the increase of wealth and commerce in Europe, private bankers
established themselves in all the principal cities and towns. They re-
ceived money on deposit; they managed the money affairs of states and
individuals; they lent money to such borrowers as could give the neces-
sary security; and they bought and sold bills of exchange, bullion, and
The English bankers were not slow in perceiving the profits which
the Bank of England derived from the circulation of its notes. They
imitated its example.
Complacency is dangerous, especially in a rapidly changing world. For
decades, Japanese bankers were complacent with a rapidly growing
economy and with cozy relationships with government bureaucrats who
pursued policies that virtually eliminated traditional banking risks.
Rapid economic growth, for instance, provided a steady ﬂow of deposits,
which in turn ﬁnanced corporate expansion. Rapid economic growth fur-
ther fueled corporate proﬁts and asset inﬂation that made the repayment
of loans almost...
We model the impact of bank mergers on loan competition, reserve holdings,
and aggregate liquidity. A merger changes the distribution of liquidity
shocks and creates an internal money market, leading to financial cost efficiencies
and more precise estimates of liquidity needs. The merged banks
may increase their reserve holdings through an internalization effect or decrease
them because of a diversification effect. The merger also affects loan
market competition, which in turn modifies the distribution of bank sizes
and aggregate liquidity needs.
The LIBOR is the London Interbank Offered Rate, which is used as a reference rate in loan
transactions between banks. The LIBOR floor, introduced in recent years to help enhance
bank loan yields in extremely low interest rate environments, is around 1%–2% (note that
until LIBOR reaches the “floor” level, bank loan returns do not increase with rising rates).
The credit spread is the market-determined spread paid to the investor for taking on the
credit risk (historically the normal range has been 3%–8%, depending on the riskiness of a
You have here a unique academic treatise on money and banking, a book which combines erudition, clarity of expression, economic theory, monetary theory, economic history, and an appropriate dose of conspiracy theory. Anyone who attempts to explain the mystery of banking—a deliberately contrived mystery in many ways—apart from all of these aspects has not done justice to the topic. But, then again, this is an area in which justice has always been regarded as a liability.
While the ECB’s policy response has, to a signiﬁ cant extent, sheltered the non-ﬁ nancial private
sector from the sovereign debt crisis, and has avoided major disruptions in the ﬁ nancing of the
economy, the ﬁ nancing environment of both banks and the non-ﬁ nancial private sector of countries
affected by the sovereign debt crisis remains challenging.
This paper discusses the effects of bank competition on bank loan and deposit rate levels as well as on
their responses to changes in market rates and, hence, on the monetary policy transmission mechanism.
Given the prominent role of the banking sector in the euro area’s financial system, it is of significant
importance for the ECB to monitor the degree of competitive behaviour in the euro area banking
market. A more competitive banking market is expected to drive down bank loan rates, adding to the
welfare of households and enterprises.
For example, take the claim that many poor households will pay high interest rates
without flinching, and the related claim that the existence of moneylenders implies the
insensitivity of most borrowers to interest rates. Moneylender loans are often taken for short
periods of less than a month, however, and are often used as a short-term patch to meet pressing
consumption needs--while microfinance loans are typically held for several months at minimum
and are targeted at business investment. The standard Grameen Bank loan, for example, had a
Non Performing Loan Rate is the most important issue for banks to survive. There are lots of factors responsible for this ratio. Some of them belong to firm level issues and some are from macroeconomic measures. However this study is based on the blend. It considers the Real GDP per Capita, Inflation, and Total Loans as independent variables, and Non Performing Loan Ratio as dependent variable. Study uses the data of US banking sector from official web sources of US Federal Reserve System.
The purpose of this research is to determine the factors that affect the profitability of commercial banks in Vietnam. Beside, the article has given the best solution to managers and investors to decide their business strategy and minimize financial risk.
As an asset class, we believe bank loans are likely to outperform most other fixed income
asset classes that have duration risk in a rising interest rate environment. That potential
outperformance will likely be somewhat muted in the early phases of the environment, due
to LIBOR floors.
As with other tactical or strategic allocations, the attractiveness of bank loans should be
assessed against the investor’s overall objectives.
This paper analyzes the importance of retail consumers’ banking relationships for loan defaults
using a unique, comprehensive dataset of over one million loans by savings banks in Germany.
We find that loans of retail customers, who have a relationship with their savings bank prior to
applying for a loan, default significantly less than customers with no prior relationship.
This project report is an analysis of the current situation, needs, and potential medium-and long-term strategies to develop agricultural research and extension in Viet Nam. The report provides a long-term road map for agriculture research and extension assistanceand it will be used as a basis for the development of a forthcoming ADB technical assistance, which will in turn be used as a basis for a proposed investment loan in Agricultural Science and Technology.
One of the lessons that the Bank has learned from the experience of so-
cial funds is that involving poor citizens in the choices, design, and imple-
mentation of projects responsive to their immediate needs may unearth
new but modest sources of domestic savings for capital formation. These
savings, effected mainly through the labor of the poor and the mobiliza-
tion of parts of their unspent incomes, frees up public resources for other
uses. This can potentially reduce the claims of the public sector on the