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Risk Management Report: Saint Charles Bank
Finance & Accounting
Pages 14 (3514 words)
Risk Management Report A case study of Saint Charles Bank Institution: Name: Date of Submission Question 1 Comment on the financial situation of the bank as presented on the Exhibits 1 and 2. (LO2, LO5) With the deteriorating health of the banking institutions and the recent surge of bank failures as a result of the current global financial crisis, it is justified that bank performance receives increased investigation from both scholars and industry specialists .
However, the limitations of this method coupled with advances in management sciences have led to the development of alternate methods such as non-parametric DEA and parametric Stochastic Frontier Approach (Berger and Humphrey,1997) . Berger & Humphrey (1997) assert that the whole idea of measuring bank performance is to separate banks that are performing well from those which are doing poorly. They further indicated that, “evaluating the performance of financial institution can inform government policy by assessing the effects of deregulation, mergers and market structure on efficiency” (p175). Bank regulators screen banks by evaluating banks’ liquidity, solvency and overall performance to enable them to intervene when there is need and to gauge the potential for problems (Casu et al, 2006). On a micro-level, bank performance measurement can also help improve managerial performance by identifying best and worst practices associated with high and low measured efficiency. When looking to improve their performance, banks compare the performance of their peers and evaluate the trend of their financial performance over time. ...
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