Cost of banking activities

Responding to the needs of shareholders and investors, earning profit and income and covering current expenses are the hugest goals of each economic unit. Banks and financial institutions also have these rules. Perhaps the most important thing for them is calculating and understanding the cost of money.

11p longtimenosee10 26-04-2024 1 1   Download

This research aims to extend the understanding of contingency theory and the factors influencing Activity-Based Costing (ABC) and Activity-Based Budgeting (ABB) system implementation in developing economies. Using qualitative case-based methods, the unique features of ABC/ABB implementation in three large Thai companies from telecommunications, banking and oil industries were investigated. Interviews were conducted with key personnel involved with the implementation process. The Telecommunications Company and Bank implemented ABC and the Oil Company implemented ABB.

328p runthenight04 02-02-2023 2 1   Download

Through the collection of secondary data, the study was conducted to understand the impact of economic integration on banking performance in Vietnam. The data of the article is taken from 21 commercial banks in Vietnam from the period 2010 - 2021.

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Commercial banks are typical hierarchical organizations, in which the multipleprincipal-agent problem exists and induces serious internal collusive corruption. This article analyzes the collusive corruption between credit supervisors and credit managers in bank credit activities, through three possible situations of supervision. The results indicate that internal supervision is necessary even though supervisors and managers could collude. Meanwhile, it is inefficient for banking only depending on the costly external supervisor. Finally, the implications of findings are discussed.

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The main aim of this article is to explicitly present what the parallel banking system is and its activities. The first part of the paper focuses on how this banking system could support real economy and contribute to the regional (and the wider) growth by operating supplementary to the systemic banking system. A special reference is done on the regulation frameworks that are applied on those banks in European Union and in United States.

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This chapter presents the following content: What are service organisations? differences between service and manufacturing businesses; value chains in service firms, retailers and wholesalers; service production environments; activity-based costing for services; case study: Service costing at Adelaide Bank; when should firms estimate their service costs? flow of costs in service firms; costing in retail and wholesale businesses.

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Transactional costs are a large burden for Georgian lenders. Agricultural borrowers live and farm in remote locations compared to major cities where banks tend to locate branch offices. When one considers distance and the required routine monitoring of business activities, the transactional cost for long-term loans is higher than other loan products. In addition to transactional costs, the bank overhead costs in Georgia are high. According to a recent World Bank review on the financial sector, overhead costs range between 14-18% of earning assets.

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The World Bank Institute was established by the World Bank in 1955 to train officials con-cerned with development planning, policymaking, investment analysis, and project imple-mentation in member developing countries. At present the substance of WBI’s work empha-sizes macroeconomic and sectoral policy analysis.

270p namde01 08-04-2013 82 16   Download

When considering supply side factors, we study characteristics of the financial sector that would influence the speed of adoption of mutual funds. We examine the effect of bank concentration, restrictions placed on banks to enter the securities business, the number of distribution channels available for funds, the presence of an explicit deposit insurance system for banks, and the time and cost to set up a new fund. We find that nations that restrict banks from entering the securities business have smaller equity and bond fund sectors. In addition, countries with a...

251p khanhchilam 29-03-2013 67 10   Download

There are two key ways banks fund their lending activity to SMEs; through deposit taking from their customers and, where the lending requirements exceed the value of the deposit base, through borrowings from wholesale money markets. When providing Loans or Overdrafts to SME’s, banks tend to quote an interest rate made up of a ‘cost of funds’ using a market reference rate, plus a margin. With regard to the ‘cost of funds’ it is clear from the explanation below these reference rates no longer reflect the true cost of funds to the banks.

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National Bank for Development designed its Microcredit concept under a lending system based on the banking culture to achieve the social and national goal in accordance with the Egyptian context. It is designed to be responsive to the immediate short credit needs of small entrepreneurs with no commercial record or license.

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To illustrate why the ring-fencing of market making activities would be that detrimental an example can be provided: Since the Liikanen Report does not recommend including underwriting within the ring-fence, commercial banks could still engage in these activities. Nevertheless, if these banks were to go to the secondary market to place these securities, then this activity would be considered as market making and therefore would be included in the ring-fencing scope.

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Compared to Germany, the gross income of Italian banks is relatively large, but so are their operating costs (Figure 3). In both countries, the two time series show a negative trend, but in Italy the decrease in costs more than compensates the decrease in gross in- come. The negative trend in Italy’s gross income is driven by its shrinking interest income (Fig- ure 4), a trend also observed in many other European countries. However, this effect was countered by a marked increase in non-interest income.

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Cost competition between state regulators and the OCC, and among state regulators themselves, has been fueled by two important structural changes that have occurred in the banking indus- try over the past two decades. The number of bank charters has declined, largely because of increased bank merger and consolidation activity, and the size and complexity of banking organiza- tions has increased. The first change—a decline in the number of charters—means that the OCC and state regula- tors are competing for a declining member base.

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To avoid credit rationing, banks use other methods to screen potential borrowers. 24 For example, banks can use extensive and comprehensive covenants on loans to mitigate agency costs. As new information arrives, covenants can be renegotiated. Covenants may also require collateral or personal guarantees from firms about their future activities and business practises in order to maximise the probability of repayment. The banks lending history produces valuable information that evolves over time.

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The socialist fiscal system was implicit in the vertical structure of planning and prices. In the Soviet Union, virtually all investment activity was channeled through the budget. The primary nominal sources of tax revenue were enterprise profits and resource rents, turnover taxes charged on the difference between retail prices of consumer goods and their nominal enterprise cost, and profits of a foreign trade monopoly.

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The takeover of toxic assets by the government at zero cost and the corresponding write- down of assets will create transparency, avoid the high expense of pricing distressed assets, and will insure that shareholders are the first ones to bear the cost of failure. 27 The risk of moral hazard will also be effectively limited. A zero-cost acquisition is also justified based on the fact that the active management of the troubled assets is impaired by their complex structure. This approach will also keep the bad bank’s initial capital requirements at a minimum....

133p enterroi 02-02-2013 42 6   Download

A national infrastructure council should also be tasked with collecting and dis- seminating best practices pertaining to project selection, preventative mainte- nance, and construction cost reduction. It would also promote the use of common objective measures to evaluate the progress of ongoing and completed infrastruc- ture projects. The council would work to identify opportunities for innovation and help develop new mechanisms for leveraging private investment.

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Energy is a major cost driver when it comes to getting water to the tap and treating wastewater, but our current system does not adequately account for energy needs when planning water-system improvements. A federal lending authority, however, could allow for drinking and clean water infrastructure investments to be coordinated with the expansion of electrical capacity required to support them. Or it could arrange for channel deepening at ports to be planned alongside the bridge replacements required to ensure new and larger freight vessels can access harbors.

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We discussed differential reporting in Chapter 1. Essentially, if an organization has no pub- lic accountability and all owners consent, including those not otherwise entitled to vote, simpler accounting rules may be adopted in certain areas. Remember that the entities that are eligible for this GAAP treatment are private com- panies—those with no shares or debt traded on public markets. Usually, this is the smaller business sector, but not always. There are some large private companies in Canada.

58p bocapchetnguoi 06-12-2012 64 3   Download