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

NET EARNINGS IN DISTRICT 1 329 ratios also regress to type. If these ratios are high, they tend to fall; and if they are low they tend to rise, the former tendency, other things being equal, operating to increase, and the latter, other things being equal, to decrease net earnings. But again, the other things are not equal, inasmuch as net earnings them- selves regress to type, those which were high in 1924 tending to be lower, and those which were low in 1924 tending to be higher in 1925. Accordingly, merely to take account of the actual net earnings ratios for banks having ratios of gross earnings and of total expense differently placed relative to their average levels at a given time, as is done in Table 191, or to take account only of the fact of regression to type, without at the same time observ- ing the amounts at different levels, is not fully to consider all of the influences, latent in gross earnings and in total expense ratios, which determine ratios of net earnings. Between 1924 and 1925, the average ratios of net earnings to earning assets for the 408 member banks in the Boston district increased from 1.82 to 1.92, or by one-tenth of a point.2” When the ratios in 1924 are grouped, as in Table 188, the largest in- crease was one-half of a point, and the largest decrease one and one-half points.?® In determining these changes, however, no account is taken of the positions of the gross earnings and of the total expense ratios of the banks relative to their average levels in 1924. This is done in Table 192, the result being that (1) for banks with gross earnings ratios above the average in 1924, ratios of net earnings fell, and for those with gross earnings below the average in 1924 they rose between 1924 and 1925; (2) for banks with total expense ratios above or below the average in [924, net earnings increased between 1924 and 1925; (3) the greatest fall in net earnings occurred in banks with gross earnings above and total expense ratios below their average level in 1924 —it was these which were highest in 1924;2° and (4) the great- est rise in net earnings characterized the banks with gross earn- ings below and total expense ratios above their average levels in 1924—it was these which were lowest in 1924.29 Other features of Table 192 are of interest. When gross earn- Ings and total expense ratios were both above their respective average levels in 1924, net earnings ratios declined slightly be- iween 1924 and 1925; when they were both below these levels, the 27 See Table 18s. 28 See Table 188. 29 Gee Table 1071.

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