Early studies on the effect of holding company affiliation on bank performance yield some curious results (see 9, 11, 12). Specifically, these studies did not find that holding company affiliation ...results in changes in capital-asset ratios or bank profitability.
John J. Mingo, senior advisor at the Division of Research and Statistics, the Board of Governors of the Federal Reserve System, recently spoke at a conference called Credit Risk Modeling and the ...Policy Implications. Excerpts of his speech are presented. Significant effort is underway within the Federal Reserve System and at other domestic and foreign agencies to identify the pros and cons of alternative schemes for a new Basle standard. In the end, it seems clear that the complexity of financial transactions - and therefore the difficulty of determining capital adequacy - will continue to increase. The next iteration of the Accord is therefore likely to be only that, a next step.
THE RELATION BETWEEN FIRM CONCENTRATION IN LOCAL BANKING AND 2 MEASURES OF PRICES ON SPECIFIC BANKING PRODUCTS ARE EXAMINED. AT SOME LEVEL OF CONCENTRATION, BANKING MARKETS BECOME 'EFFECTIVELY ...MONOPOLIZED'. IN MOST OF THE 2800-PLUS LOCAL MARKETS, BANKS HAVE ACHIEVED THE MONOPOLY PRICE-OUTPUT CONFIGURATION. SOCIAL COSTS AND BENEFITS OF CHANGES IN MARKET CONCENTRATION ARE ASYMMETRICAL. EVEN MERGERS BETWEEN DOMINANT BANKING FIRMS ARE UNLIKELY TO RESULT IN GREAT SOCIAL COSTS IN TERMS OF MONOPOLY-INDUCED PRICE INCREASES. BUT MAJOR DECLINES IN CONCENTRATION CAN HAVE IMPORTANT PRICE REDUCTION BENEFITS IF THE DECLINE PUSHES THE MARKET INTO THE REGION WHERE THE TRADITIONAL CONCENTRATION-PRICE RELATION SEEMS TO HOLD. GRAPH. TABLES.
In an open dual economy, the reallocation of factors to the industrial sector is accelerated whenever the region can sell its industrial product on a world market, or can invest at a level greater ...than domestic savings, by borrowing abroad. The industrialization is slowed, however, by any increase in the demand for 'backward'-sector products, as for example, when such products are demanded as inputs into the industrial production process. In the model presented here, these industrial input requirements are an important determinant of the growth of per capita income and, especially, the borrowing-lending position of a developing region.
THE REGRESSION RESULTS INDICATE THAT A STATISTICALLY SIGNIFICANT RELATION EXISTS BETWEEN MARKET CONCENTRATION AND PRICES OR SERVICES IN COMMERCIAL BANKING. UNLIKE PREVIOUS STUDIES, THE RESULTS SHOW ...THAT THE CONCENTRATION-PERFORMANCE RELATION IS OF IMPORTANT MAGNITUDE, ESPECIALLY WHEN THE AGGREGATED IMPACT OF CONCENTRATION ON A WHOLE ARRAY OF PERFORMANCE VARIABLES IS CONSIDERED. WITH RESPECT TO SOME SPECIFIC PRICES AND SERVICES, AND IN THE AGGREGATE, THE CONCENTRATION-PERFORMANCE RELATION IS CURVILINEAR. SPECIFICALLY, A GIVEN INCREASE IN CONCENTRATION WILL HAVE A GREATER IMPACT ON PRICES, THE LESS CONCENTRATED IS THE MARKET INITIALLY. BANK PERFORMANCE CAN BE SIGNIFICANTLY REDUCED BY ACTIONS THAT INCREASE CONCENTRATION IN BANKING MARKETS. MOREOVER, REGULATORS SHOULD BE AT LEAST AS WARY OF MERGERS IN RELATIVELY UNCONCENTRATED MARKETS AS IN RELATIVELY CONCENTRATED MARKETS.
THE REGULATION OF BANK HOLDING COMPANIES Chase Jr, Samuel B.; Mingo, John J.; Maisel, Sherman J.
The Journal of finance (New York),
05/1975, Letnik:
30, Številka:
2
Journal Article
Information from internal credit risk models might be usefully incorporated into regulatory or supervisory capital policies. Internal capital allocations against credit risk are based on a bank's ...estimate of the probability density function (PDF) for credit losses. Credit risk models are used to estimate these PDFs. Four aspects of credit risk modeling are: 1. the conceptual framework, 2. credit-related optionality, 3. model calibrations, and 4. model validation. Incorporating internal credit risk measurement and capital allocation systems into the supervisory and/or regulatory framework will occur neither quickly nor without significant difficulties. The current one-size-fits-all system of risk-based capital requirements increasingly is inadequate to the task of measuring large bank soundness.
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