Banking standards under the federal reserve system

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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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Correlated series for all Member Banks by districts

Collection:: Economics Books

00 BANKING STANDARDS TABLE 122 ° RATIOS OF ToTAL EXPENSE TO GROSS EARNINGS, ALL MEMBER BANKS IN FEDERAL RESERVE DistrICT 1, CLASSIFIED BY RATIOS oF TiME To Gross (ToraL) Deposits, 1923-1925* RATIOS: Time Deposits to Gross (Total) Deposits Total. .. No time Deposit. as and less...... 316-50... c00en. 1gS ye Ver 75...000n. Number of Ranks 1023 RATIOS: Total Expense to I»oss Earninc 5 7 1924 Number “a RATIOS: Total - “<pense to -3ss Earnin< c 3.0 1925 RATIOS: Total Expense to Gross Earnings Number of Banks H 70.8 4 . QO IC4 | 66.0 97 73.0 I x16 74.0 47 24.0 *Taken from the 1923, 1924, and 1925 reports on ‘Operating Costs and Profits, based on the Exper- iences of all Member Banks in Federal Reserve District I,” prepared by Frederic H. Curtiss, Chair- man and Federal Reserve Agent, Federal Reserve Bank of Boston. classified according to percentage amounts of time to gross (total) deposits. Concerning a chart illustrating the ratios for 1925, Mr. Frederic H. Curtiss, Chairman and Federal Reserve Agent of the Federal Reserve Bank of Boston, writes as follows: “Tt [the chart] indicates that banks having less than 14 of their gross deposits in the form of time deposits are the cheapest to operate, and therefore [sic] the most profitable. As soon as the ratio of time deposits to gross deposits rises appreciably above 25% the operating costs rise above 70% of gross earnings— 70%! being the typical operating ratio for all banks in Federal Reserve District 1.”12 Similar explanations are given for the charts applying to the years 1923 and 1924. That is, for 1923, 1924, and 1925, for member banks in the Boston district, Mr. Curtiss found that amounts of time deposits, as ratios of gross (total) deposits, were positively correlated with amounts of total expense as ratios of gross earnings. We find a like correlation between these ratios for member banks in the entire Federal Reserve system for the years 1919-192 5—*“bank,” in our analysis, being the combined member banks in each dis- trict.!3 Mr. Curtiss found inverse or negative correlation between 11 The arithmetic means computed by us for 1923, 1924, and 1925, are respec- tively 42.00, 72.80, and 91.10. For the seven years, 1919-1925, the average per- centage is 69.60. 12 Curtiss, 0p. cit., Report for 1925, p. 3. 18 Gee Table 121.

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