Banking standards under the federal reserve system

Bibliographic data

Monograph

Identifikator:: 1762969653

URN:: urn:nbn:de:zbw-retromon-142432

Document type:: Monograph

Title:: Banking standards under the federal reserve system

Place of publication:: Chicago

Publisher:: A. W. Shaw Company

Year of publication:: 1928

Scope:: xxxviii, 420 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

38s ble. Change occurs normally only when either or both gross earnings and total expense ratios change. APPENDIX I Group 2. In this group, the constant, K, = -o0.20, is without significance, but the constant, K; = + 2.16 4- 0.27, (see Table IV), is significant. For banks in this group, in which total ex- pense ratios did not change, there is a strong constant tendency for net earnings ratios to increase 0.216 points per year. This is presumably due to the regression tendency for gross earnings ratios in this group to increase. Moreover, total expense ratios must increase as much as (G2=) 5.5 (or 0.55 of a point) to offset this. This fact may be seen also from regression line @ in Chart I. Group 3. For banks in this group, in which gross earnings ratios did not change, there is a strong constant tendency for net earn- ings ratios to decrease. The amount of the decrease is given by the constant K,=—-1.32 + 0.39, which means a decrease of 0.132 of a point per year. This is presumably due to the regres- sion tendency for total expense ratios in this group to increase. Moreover, gross earnings ratios must increase as much as Goons =) 1.7 (or 0.17 of a point) in such banks to offset this tendency. This is shown graphically on Chart I, regression line ®. The constant K; == — 0.35 + 0.48 also shows a constant tend- ency for net earnings to decrease, but it is without significance because of its large probable error. Group 4. In this group, both constants, K, = -} 1.02 + 0 20 and K, = 2.47 + 0.31, are significant in showing a strong constant tendency for net earnings ratios to increase from year to year, in the first case, for banks in which gross earnings ratios did not change; and in the second case, for banks in which total expense ratios did not change. In the latter case the tendency is the larger. In banks in this group, gross earnings ratios must decrease =) 1.3 (or 0.13 of a point) to offset this constant tendency for net earnings to increase, and total expense ratios must increase as much as Gal=) 7.5 (or o.75 of a point) annually to offset it. These facts are shown graphically in Chart I by the regression lines ® and @, respectively.

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