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 IV. Norms, trends, and correlations of series in the Boston and in the New York districts by Member Banks

Collection:: Economics Books

282 BANKING STANDARDS Confidence in the significance of the results is secured from these different approaches to the problem so far as the member banks in the Boston district are concerned. It is true that the data refer to but two years, but, as indicated in Table 132 for district differences and in Table 134 for percentage changes from year to year, analogous relations hold for all districts, for the Boston district alone for the years 1919-1925, and for the respec- tive ‘districts in 1924 and 1925. These results suggest the prob- ability, if they do not demonstrate the fact, that the phenomenon observed in the Boston district for each of the years, 1924 and 1923, and for the two years combined, is not peculiar to this period and to this district. It is unfortunate that data are not available for the individual Boston member banks with which to duplicate, for gross earn- ings ratios, the types of analyses presented in Chapters IX and X, in which district ratios of gross earnings are correlated with variable operating conditions. It will be recalled that, accord- ing to three methods of measurement, such ratios were positively correlated with ratios of loans and discounts to earning assets. Moreover, they increased most from year to year when ratios of loans and discounts to earning assets were high—that is, above the respective district levels—and increased, and they decreased most from year to year when such ratios were low—that is, below the district levels—and decreased from year to year. On the other hand, gross earnings ratios were generally negatively cor- related with total deposit ratios and also with ratios of demand deposits to earning assets and to total deposits. Again, when total deposit and demand deposit ratios increase or decrease, ratios of gross earnings decrease or increase, respectively. On the other hand, ratios of time deposits to earning assets and to total deposits are positively correlated with gross earnings ratios. Such are a few of the types of relations found to obtain between district ratios of gross earnings and variable operating conditions. But district ratios of total expense are correlated in much the same way as are district ratios of gross earnings with each of the above series. Accordingly, gross earnings ratios and total expense ratios tend to be positively correlated with each other. This relation is undoubtedly causal so far as interest is common to both series. District differences in gross earnings ratios depend primarily

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