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.

Chapter

Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

SERIES CORRELATED WITH NET EARNINGS 250 TABLE 153 NATURE OF CORRELATION IN PERCENTAGE DEVIATIONS AND YEAR-TO- YEAR CHANGES IN DIFFERENT SERIES PAIRED SERIES CORRELATED Independent Variables Dependent Variables Loans and Discounts to Earn- ing Assets. .............. Net Earnings to Earning As- ast Net Earnings to Earning Assets. .............u... Loans and Discounts to Earn- ing Assets Total Deposits to Earning Assets. . oouvwiiomiionisg Net Earnings to Earning As- tets Net Earnings to Earning As- SES. itera Total Deposits to Earning NATURE oF CORRELATION Differ- ences from Jistrict Averages Changes , {rom Year to Vaap Differ- ences from Tountry’s Yearly Average Positive Positive Positive Positive Negative None —— Negative Negative Negative Positive® Negative Negative iw. ratios of loans and discounts to earning assets larger than the average will tend to raise the ratio of gross earnings to some- thing more than 6%. But, as already found, loans and discounts are also positively correlated with total expense. Accordingly, if average ratios of loans and discounts are associated with aver- age ratios of total expense, ratios of loans and discounts higher than the average will tend to be associated with ratios of total expense in excess of the average. That is, if the total expense ratio is 4% under average conditions, it will tend to be in excess of 4% for series with ratios of loans and discounts in excess of the average. If both ratios, 6 and 4—gross earnings and total expense—tend to be high under these conditions, then their effect on net earnings remains in doubt. It is only when it is learned that ratios of loans and discounts to earning assets are also positively correlated with ratios of net earnings to earning assets, that it becomes apparent that their effect upon gross earnings is greater than upon total expense, thus making the ratios of net earnings something above 29% —the amount found, for purpose of illustration, to characterize average conditions in respect to loans and discounts. But forces other than those associated with variable loans and discounts are tending to influence gross earnings, total expense, and net earnings. These, among other things, have been found to be the relative size and type of change in the amounts of total deposits. Their influences, too, acting simultaneously with those

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