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.

386 BANKING STANDARDS These detailed studies of the constant regression tendencies in each group, as given by the constants K, and K,, all show the predominating influence of gross earnings over total expense in determining net earnings, and are consistent with the evidence revealed in the constants E,” and E./. It seems worth while briefly to generalize about these constant regression tendencies by referring again to Table IV, and by noting the signs and amounts of the constants K; and K, in the different groups. In Groups 2 and 4, gross earnings ratios are below their 1924 average (see Table I). If they tend to increase the following year—to regress toward their average of 6.0% —net earnings must increase in banks in which total expense does not change. The large positive values of K, for these groups represent the increases in net earnings and furnish strong indication of regres- sion of gross earnings to type. In Groups 1 and 3, gross earnings are high in 1924. If they tend to decrease the following year, net earnings must decrease in banks in which total expense did not change. The negative values of K, for these groups repre- sent the decreases in net earnings, and furnish evidence of regres- sion in gross earnings. In Groups 1 and 4, total expense ratios are above their 1924 average of 4.2%. If they tend to decrease the following year, the result must be an increase in net earnings ratios for banks in which gross earnings ratios did not change. The increase in net earnings ratios is shown in the positive values of K, for these groups. In Groups 2 and 3, total expense ratios are below their 1924 average. If they tend to increase the following year, the result must be a decrease in net earnings ratios for banks in which gross earnings ratios did not change. This decrease in net earn- ings ratios is shown in the negative values of K, for these groups. APPARENT EXCEPTIONS AND CONTRADICTIONS IN TABULAR ANALY- SES EXPLAINABLE IN TERMS OF CONSTANT REGRESSION TENDENCIES IN NET EARNINGS In the light of the discussion of constant regression tendencies in net earnings, it is possible to explain and interpret the meanings of certain values obtained in the analyses in Chapter XVII, which appeared to be exceptions or contradictions to the ruling tenden- cies there discussed.

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