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

Usage license:: Get license information via the feedback formular.

APPENDIX I RELATIVE EFFECTS OF CHANGES IN GROSS EARNINGS AND IN TOTAL EXPENSE RATIOS ON CHANGES IN RATIOS OF NET EARNINGS, MEMBER BANKS, BOSTON FEDERAL RESERVE DISTRICT, 1924-1925 IT was shown in the analysis in Chapter XVII that gross earn- ings, total expense and net earnings? regress to type—the type being their respective averages. That is, if they are high in one year, they tend to be lower the following year. Conversely, if they are low in any year, they tend to be higher the following year. It was also shown in the same chapter that gross earnings generally predominate over total expense in determining the net earnings of member banks within the Boston district. The pur- pose of this note is to present an analysis, the results of which give quantitative expressions to the relative influences of gross earn- ings and of total expense on the net earnings of these institutions. For the purpose stated, two types of linear equations are used. These are as follows: Ki+E AT— AN=v.. - (1) K:+E,AG— AN=yp. . and - in which — AN is the decrease in the ratio of net earnings to earning assets from 1924 to 1925, in units of o.1 point; + AT is the increase in the ratio of total expense to earning assets from 1924 to 1923, in units of o.1 point; + AG is the increase in the ratio of gross earnings to earning assets from 1924 to 1925, in units of o.1 point; +X, is a constant representing the average amount of increase in 1 Prepared, for the most part, by Mr. J. A. Folse, Research Assistant, Bureau of Business Research, Northwestern University. 2 Throughout this note it is understood that in the use of these terms unqualified, their respective ratios to earning assets is meant.

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