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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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

332 BANKING STANDARDS ratios increase.®® But increasing gross earnings ratios occasion a larger increase in net earnings ratios than do decreasing total expense ratios.3* Similarly, decreasing gross earnings ratios bring a larger decrease in net earnings ratios than do increasing ratios of total expense.?> Moreover, when gross earnings ratios increase (a condition favorable to increasing ratios of net earnings) and at the same time total expense ratios increase (a condition making for decreasing ratios of net earnings), the net change in net earnings ratios is a rise, proof conclusive that the dominating influence is the change in ratios of gross earnings. Similarly, when gross earnings ratios decrease (a condition tending to re- duce net earnings ratios) and at the same time ratios of total expense decrease (a condition tending to increase ratios of net earnings), the net change in net earnings ratios is a fall, thus indicating the dominant influence of the change in ratios of gross earnings. Changes in net earnings ratios between 1924 and 1925 have been found to be functions of the size of ratios of gross earnings and of total expense in 1924,3% and of the type of change in these ratios between 1924 and 1925.3" In general, the forces exert opposite influences. This is universally the case when the effects of the respective forces are measured concurrently for both series —gross earnings and total expense ratios.2® Moreover, it tends to be true when they are measured separately.®® Accordingly, the net effects on the changes in ratios of net earnings between 1924 and 1925 need to be determined when the two forces act simul- taneously. Table 194 shows by direction and amount the net year-to-year changes in net earnings ratios for banks with gross earnings ratios increasing or decreasing from positions above or below the av- erage in 1924, and having ratios of total expense differently placed relative to their average in 1924. The net change is upward when ratios of gross earnings are increasing, and down- 33 See the averages of the columns in Table 193. 3% As indicated by the respective points change: 4.34 and 4.23. 85 As indicated by the respective points change: —.27 and -.04. 8 See Table 192. 7 See Table 193. 8 See the signs in the corresponding blocks in Tables 192 and 193. Mo the signs in the corresponding average lines and columns in Tables 192 and 193.

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