Smaller banks spend proportionately more on compliance, yet don’t perform better than larger ones, at least in one key metric.
The Financial Accounting Standards Board (FASB) recently released a proposal that would change the way financial institutions set aside funds to cover losses on loans, debt securities and other assets. Under current accounting rules, the allowance for loan and lease losses is based on incurred losses; the new model, if adopted, would require the allowance to be established for losses expected over the life of the loan based on current and future economic conditions, historical losses, and other factors.
Bank earnings were up moderately at the national level but were mixed in District states in the second quarter of 2012, while asset quality improved once again across all states. Overall, the District and national banking industries are in considerably better shape now than they were one year ago.
Two “Dialogue with the Fed” public events—one in English and one in Spanish—explored the reasons behind Europe’s sovereign debt crisis and what the implications may be for the United States.
The Dodd-Frank superseded and extended the coverage of the FDIC’s popular TAG program, which is set to expire on Dec. 31, 2012. Opinions are divided among numerous bankers, banking organizations, lawmakers and others on whether TAG should continue or terminate.
The slight uptick in bank earnings experienced by District banks and their U.S. peers in the third quarter did not carry over into the final quarter of 2011.
After a large increase in the first quarter of 2011, earnings growth at District banks came to a standstill in the second quarter.
Bank earnings rose dramatically in the Eighth District and U.S. peer institutions in the first quarter of 2011, primarily because of a sharp drop in funds set aside to cover future loan losses.
Earnings are up but so is loan delinquency
After two straight quarters of slight improvement, profitability at Eighth District banks dipped in fourth quarter 2009.
Earnings and asset quality at District and U.S. banks continued their downward slide in the first quarter of 2009.
The numbers provide clues to project when commercial and industrial vacancy rates will finally peak in several District metro areas.
Earnings and asset quality remained weak throughout the Eighth District in the second quarter.
In response to tight credits and a still-weakening economy, District banks and their U.S. peers continued their descent in the third quarter.
Despite being around for nearly a century, industrial banks have been in the spotlight only in the past couple of years. That's largely because of who wants to own them—big-box retailers like The Home Depot and Wal-Mart.
Until mid-1997, the tigers of Southeast Asia were the envy of the economic kingdom. So what happened? It’s not a simple “tail” to tell.
With industry consolidation continuing apace, economists are increasingly being tapped to provide insight into regulators’ least-favorite game: Monopoly.
With deposits falling and loan demand rising, what’s a bank to do? Many banks are selling securities to fund loans, others are turning to their local Federal Home Loan Banks.
Looking for a better way to measure investment risk? Duration could be the answer.
Since the 1930s, when commercial and investment banking were first split apart, the rationale for such a separation has been called into question. Today, it may finally be time to reunite the two and let banks diversify into other lines of business.
It's a fast track, and mutual funds have pulled away from the pack in the race for our investment dollars. Part of the surge can be explained by commercial banks' entry into a race they've previously been shut out of.
Money market mutual funds (MMMFs) were subject to some modest regulatory changes in 2010, but many observers argue that the industry is in need of a more substantial overhaul. The $2.9 trillion MMMF industry is objecting, pointing out that the effects of the 2010 reform should be thoroughly examined before further changes are adopted and that radical changes would threaten the industry’s survival.