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Bank Profitability: Decoding the Income Statement

Tom Spencer

How do banks make money? What is a bank really worth? Firstly, by outlining the major items on a bank’s income statement, and then by discussing key ratios that are commonly used to measure profitability and to estimate the market value for banks. Where does this money ultimately go?

Banking 88
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Chinese Banks Hemorrhaging Deposits, 1st Quarterly Drop Since 1999; Banks Offer iPhones, Even Cars for Large Deposits

MishTalk

Chinese banks have experienced an outflow of deposits for the quarter for first time since 1999. To compete for funds, Chinese banks offer anything from fresh vegetables for small deposits to a Mercedes A180 for deposits big enough and long enough. The effective yield on the Mercedes is approximately seven percent!

Banking 74
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Inflation: Understanding its Impact on the Economy

Tom Spencer

For example, the Federal Reserve aims to achieve 2% inflation as an ideal benchmark to avoid its counterpart, deflation. Businesses also need to pay more for inputs, like raw materials and labour, leading them to scale back production or further increase prices. Most mainstream economists have a strong aversion to deflation.

Policies 147
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Pettis on Strains in China's Banking System; Avoiding the Fall

MishTalk

Next year will be a very important year for China because possible strains in the banking system and the intensity with which the reformers present their case will give us a better sense both of how much debt capacity the country retains and of how well positioned Xi Jinping and his allies are to implement the needed reforms.

Banking 71
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Argentine Central Bank Chief Quits in Currency Dispute; Hyperinflation On the Way?

MishTalk

On Tuesday evening, Argentine President Cristina Fernández accused Juan Carlos Fábrega, head of Argentina’s central bank, of " provoking a devaluation of the peso ". In response Head of Argentine Central Bank Quits. There was a sharp sell-off in the benchmark Merval stock index after Mr Fábrega’s departure was announced.

Banking 69
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Crude Plunges Following OPEC Decision to Not Cut Production

MishTalk

Nonetheless, and in spite of falling prices and pleas from Venezuela to restrict production, OPEC decided to take no action. The group maintained its collective production ceiling of 30 million barrels a day, Ali Al-Naimi, Saudi Arabia’s oil minister, said yesterday after the 12 nations met in Vienna. Brent crude dropped as much as 8.4

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Regulator Fines Barclays for Gold Manipulation: Permanent Price Suppression?

MishTalk

million after accusing a former trader at the bank of improperly influencing gold prices at the expense of a customer. The process of setting the benchmark price for gold in London dates to 1919. It is set twice a day by five banks that serve as market makers, according to the London Bullion Market Association. Surprising?