* These theories of banking attain a very special entailment in the political economy of banking * They position banks on the fundament of market conditions such as number of banks in the market, demand rates, information availability, financial self-di rection to the institutions, transaction costs, and nature of their banking ope rations * providing cognition into bank behavior ?net interest margin ? mention crunch ? credit rationin?securitization fire involution MARGIN * commentary * gain interest margin usually is the measure of how booming is a bank investment decision compared to its debt situation * a negative value shows that banks had had a bad investment decisions manifest that interest expenses were much larger that investment returns, while a irrefutable value shows that banks had an optimal investment decisions gaining it profits and arrogant returns for that period CALCULATIONS * Net interest margin (NIM) * Total contact Income - Total Interest Expense/average earning assets * banks has deposits of 100$ and pays 10$ interest on them and gain 20$ of interest or return of investment on them so 20-10/100=.10% NIM foulness OF NIM * NIM is usually ace of the main aspects in evaluating the bank . ! * watchfulness system, evaluating what is a good focusing and a bad one * positiveness of the bank. * optimal investment decisions by the bank * liquidity position to go over an efficient liquidity management and lowering liquidity ratio thus increasing NIM. DETERMINISTS OF NET INTEREST MARGIN (internatl factors) * Net interest spreads NIS which is the average loss between...If you want to get a full essay, order it on our website: OrderCustomPaper.com
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