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Bank Valuation: Understanding Key Ratios and Metrics

Tom Spencer

In the previous article , we looked at how banks make money and how they must meet capital requirements. Efficiency ratio The efficiency ratio measures effective cost management and operational efficiency, and is defined as non-interest expenses divided by revenue. We will examine each in turn.

Metrics 88
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Mish's Global Economic Trend Analysis: Reader Question: Does the.

MishTalk

Reader Question: Does the Fed Balance Sheet Properly Reflect QE Announcements? The feds balance sheet doesnt reflect it. The balance sheet was up $720 billion from Aug 1, 2012 to Aug 1, 2013 ($309B in treasuries and $393B in MBS) but that is only $60B per month. Feds Balance Sheet. QE History.

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China Interest Rate Crisis Continues: 7-Day Interest Rate Doubles to 10% in One Week; China Bans Words "Cash Crunch"

MishTalk

Rates continued to surge on Monday, however, in China’s money markets — a key source of short-term funding for commercial banks and also for financial institutions engaged in risky, off-balance-sheet shadow lending. China’s banks are scrambling for short-term cash to meet month-, quarter- and year-end regulatory requirements.

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ECB's Targeted Lending Spree Starts Out As Flop; Modern Monetary Insanity

MishTalk

Following on the "success" of the ECB''s LTRO (Long Term Refinance Operation) which did nothing to spur lending and everything to create the biggest sovereign bond bubble the world has ever seen, ECB president Mario Draghi announced a TLTRO or Targeted LTRO on September 4. The ECB''s intent is to spur lending. With inflation as low as 0.4

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5 Ways Your Data Strategy Can Fail

Harvard Business

Paradoxically, “data” appear everywhere but on the balance sheet and income statement. Leadership must realize that earning even a fraction of the value data offer takes more than simply bolting an AI program into one department or asking IT to digitize operations. Except for very few, this hasn’t happened.

Data 32
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How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business

After all, if you’re trying to sell a product or strategy, you need to be able to demonstrate that it is both practical and high margin. Here are some strategies to improve your financial intelligence. See More Videos > See More Videos > Tackle the balance sheet. Overcome your fears. Related Video.

Finance 28
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Fed Minutes Show Majority Believe "Marginal Efficacy of QE Likely Declining"; Economy Turned the Corner?

MishTalk

Inquiring minds are reading Minutes of the December 17-18 FOMC Meeting to see what the Fed is thinking. Investors appeared to read the economic data releases over the intermeeting period as better than had been expected and therefore as raising the odds that the FOMC might decide to reduce the pace of asset purchases at its December meeting.