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.

374 BANKING STANDARDS net earnings for banks in which total expense did not change, from 1924 to 1925, in units of o.1 point; +X. is a constant representing the average amount of increase in net earnings for banks in which gross earnings did not change, from [924 to 1925, in units of o.1 point; +E’; is a coefficient expressing the effect of a change in total ex- pense ( AT) on a change in net earnings (AN); +E’, is a coefficient expressing the effect of a change in gross earn- ings (AG) on a change in net earnings (AN); pis a residual. It represents the discrepancy between the observed change in net earnings and (1) that computed from the observed change in total expense alone (from equation (1) ); or (2) that com- puted from the gross earnings alone (from equation (2) ). Otherwise stated, equations (1) and (2) are merely the equa- tions of the regression lines, respectively, of the annual change in net earnings on the annual change in total expense, and of the annual change in net earnings on the annual change in gross earn- ings, the origin of each line being the point of zero change in net earnings and in the other two variables. The assumed constants, K,, K,, E,” and E/, were derived by the method of least-squares. The probable errors of these quanti- ties were, in each case, computed rigorously from the normal equations, and the residuals, v, of the substitution in the observa- tion equations. TaBreE I Groups AND NUMBERS OF MEMBER BANKS, BosToN FEDERAL RESERVE DistrIiCcT, RELATIVE TO AVERAGE GROSS EARNINGS AND TotAL EXPENSE RATIOS, 1024 RATIOS: GROSS EARNINGS TO EARNING ASSETS, ABOVE OR BELOW THE 1924 AVERAGE OF 6.0%, Above Below Ratios: Total EXPENSE TO EARNING ASSETS ABOVE OR BELOW THE 1024 AVERAGE OF 4.29% Group 1 Number of banks, 129 Group 4 | Group 2 Number of banks, 83 Number of banks, 132 ABOVE BerLow Group 3 Number of banks, 64 For purposes of analysis, the 408 member banks were divided into four groups according to the amounts of the gross earnings and of the total expense ratios in 1924 relative to the average gross earnings (6.0%) and the average total expense (4.2%) in

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