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

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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

SERIES CORRELATED WITH DEPOSITS 207 the directions (but not the rates) of change from year to year tend to agree. In other words, ratios of time deposits to total deposits and ratios of total expense to gross earnings are posi- tively correlated with respect to position relative to their own district level, and also as to direction of change from year to year. The year-to-year changes between 1919 and 1925 in ratios of time deposits to total deposits were predominantly upward; in ratios of investments to earning assets, they were almost evenly divided between increases and decreases. If the upper half of Table 128 is observed, it will be found that (1) net increases in ratios of gross earnings, of total expense, and of net earnings are associated with increasing ratios of time deposits and decreasing ratios of investments, and (2) that the ratios in each of the series show a net decrease when the ratios of both time deposits and investments increase. Moreover, it is seen that the net per- centage increase of 1.72 in ratios of gross earnings, for the 635 district-years in which time deposits increase, becomes 6.41% increase for the 34 district-years in which ratios of time deposits increase and those of investments decrease. For the 31 district- years in which both ratios increase, the net change in ratios of gross earnings is a decrease of 3.43%. Similar relations, accord- ing to direction of change, obtain for ratios of total expense. For net earnings, however, the type of association is different. The net decrease of 1.32% obtaining for the 65 district-years in which the ratios of time deposits increase becomes 5.20% for the 31 in which ratios of both time deposits and investments increase. On, the other hand, for the 34 district-years in which ratios of time deposits increase and in which investments decrease, the net change in ratio of net earnings is an increase of 2.22%. On the types of association between ratios of gross earnings, of net earnings, and of total expense and variable amounts of time deposits in relation to total deposits, when the ratios for the correlated series are the deviations from the yearly averages for the country as a whole, it is unnecessary to speak at length. In general, however, and in spite of the fact that geographical and other factors make it difficult to isolate the functional relation- ships, the inverse correlation between ratios of time deposits to total deposits and ratios of net earnings to earning assets, found for deviations from district averages and for year-to-year changes, holds for districts which were respectively above and below the

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