Many studies have evaluated the performance of the banking sector. Empirical research is critical to systematically evaluate and draw conclusions from such performance data. This paper aims to critically compare two such research papers, and will show support for the research design of Cebenoyan and Strahan.
Alternatively, Cebenoyan and Strahan (2003) investigated how active management of bank credit risk exposure through the loan sales market affected capital structure, lending, profits, and risk in the USA. Their findings were that banks which improve on their ability to manage credit risk may have greater leverage, and subsequently may lend more of their assets to risky borrowers.
Sathye's hypothesis was that the mean efficiency scores of Indian banks (i.e., publicly, privately or foreign owned) would be different to each other. Using three groups allowed Sathye to compare all three form s of banks that exist in India. And comparison data can determine if differences in efficiency are in fact real, or due to chance. Using financial ratios as the DV, Sathye also used archival data from the latest available publications for the year 1997-98 compiled by the Indian Banks' Association (IBA, 1999). She used the non-parametric test while the non-parametric approach is Data Envelopment Analysis (DEA). The test itself is suitable in that it is recognized to be robust for efficient frontier estimation. And it is a popular tool for the evaluation of the efficiency of a number of producers. DEA can be used with multiple input and multiple output models also. ...
Cite this document
(“Banking Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/283270-banking-essay
(Banking Essay Example | Topics and Well Written Essays - 500 Words)
“Banking Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/miscellaneous/283270-banking-essay.
Deposit insurance is fixed and pays claim from a pool of funds to which every depository institution frequently contributes (Freixas & Rochet, 2008). However, this covers only a fixed maximum amount per account holder. Thus depository insurance is the measure taken by various banks to protect their client’s savings, either fully or partly to avoid the bank from returning.
The recession that hit UK and other parts of the world led to revaluation of macro prudential principles with an aim of curbing financial volatility. Critics argue that creating macro prudential principles would eliminate operation, which allow banks to act without evaluating the impact of the action they are yet to take.
With the dynamism in the current business environment such as increased costs of doing business and competition, business organizations and financial institutions seek for ways of reducing costs and increasing their productivity levels. Through consolidating by mergers and acquisitions, banks hope to curb these challenges.
The lenders help the economy to be more vigorous because the borrowers will put up a business. The borrowers use the money to put up a business or two which they believe, based on hindsight or feasibility study, will generate a income.
In our present business climate, individuals need a bank account to generate MORE sales and net income.
It is said that the arbitrary nature of both risk classes and corresponding risk weights prompted the Basel Committee to seek to replace the Basel 1 risk-based capital regime by one with greater differentiation and risk sensitivity.
For this reason, the Basel Committee has proposed in the new Basel II Accord to base credit risk weightings either on a simple approach based on the ratings of external rating agencies or one of two approaches based on banks' own internal ratings.
Internet services are given to clients at its disposal. The need to use the Internet may be registered on-line through the Bank's web site. Khalfan A (2004)
With the advances in the information and technology sector, business and the market economy are changing tremendously.
By carefully orchestrating interest rates and other financial instruments in accordance with the intricacies of the market, these targets inflation rates are rendered more feasible and realistic.
Perhaps the biggest advantage of utilizing inflation targeting lies in its ability to be easily understood by the public.
The focus of the research study is to find out how the internet banking can be accomplished being least vulnerable to the intrusion from hackers and other unauthorised sources.
The third part provides the description of research method to be used in undertaking the research study.
In the European market, banks can be classified as diversified, which combine investment and corporate activities, or specialized which focus on specific market options (Buch and Goldberg 2014, 22). For instance, in Germany big banks engage in not only retail
3 Pages(750 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Banking Essay for FREE!