Bank Management《银行管理学》（第五版）课后习题答案 .doc

银行管理学（第五版）课后题答案Chapter 1 Fundamental Forces of Change in Banking1. The fundamental competitive forces of change are deregulation/reregulation, financial innovation, securitization, globalization, and technological advances. Each increases competition by expanding the number and nature of competitors in different products and services. Regulators respond to competitive pressures to level the playing field by either imposing new restrictions on activities allowed certain participants or relaxing existing restrictions. Legislation often follows to formalize the new constraints or opportunities. Consider interest-bearing checking accounts. At one time, no firm could pay interest on checking accounts. Now everyone does in one form or another. In the interim, regulators and legislators slowly allowed different firms to offer interest-checking, often after investment banks circumvented restrictions against it. The same result occurred with the initial passage of Glass-Steagall legislation, which separated banking from commerce. For many years, commercial banks could not underwrite most securities while investment banks could not make commercial loans and accept transaction accounts. Prior to the passage of the Financial Modernization Act, Citigroup was formed and it offered full-scale commercial and investment banking services, insurance services via its Travelers subsidiary, and effectively forced the U.S. Congress to pass the Act making all this legal. 2. Securitization generally reduces the overall quality of assets because the loans that can be best securitized are the highest quality, most marketable assets with standardized features are that readily understood and valued. 3. Banks that have strong senior management, a welltrained staff, large amounts of capital, and good market share are best positioned to benefit from increased competition. They can choose the lines of business to enter and exit, have access to capital, and can expand geographically where appropriate. Strong management is evidenced by a constant reevaluation of strategies necessary to compete and the ability to implement the strategies. A banks Board of Directors should play a key role in ensuring the viable operation of the firm and continual strategic planning. 4. Investment banks generally offer services in the areas of: 1) making a market in securities, 2) underwriting securities, and 3) assisting in mergers and acquisitions, and 4) asset management. Most of these are fee-based services, which are not subject to credit risk. Commercial banks have become increasingly interested in the last three because of the possibility of earning fee income. Banks that underwrite securities help a firm or government unit place a debt or equity issue with the investing public. They do so either on a best efforts basis for a fee, or actually buy the securities from the original issuer before selling them to investors. When assisting in mergers and acquisitions, banks charge substantial fees for their efforts without taking much risk. Banks that manage assets for customers charge a fee for the service.5. Commercial paper and junk bonds provide alternative financing to bank credit for business customers. The commercial paper market came first and allowed lowrisk businesses to access funds directly from investors on a short-term, unsecured basis. The junk bond market allows higherrisk businesses the same access. Firms with the best reputations and operating performance can readily access funds in this form. Thus bank loan portfolios have been directed less at the highest quality borrowers and those lower quality borrowers with access to the junk bond market. Many commercial loan portfolios are subsequently concentrated in real estate and middlemarket business loans.6. Many banks have felt the competition from foreign banks operating in the U.S. Bank customers have more outlets for their funds and borrowers have more alternatives. Lowrisk businesses can borrow domestically or via foreign institutions that have a competitive advantage if the business operated outside the U.S. Banks with U.S. operations only thus will find that the pool of available customers is shrinking while the number of competitors with a global perspective is increasing. Bankers often fear globalization because it represents the unknown. There are cultural and language barriers that managers must overcome in order to effectively compete. Nationwide financial services companies will be greatly affected because they compete in many geographic markets throughout the U.S. and many of their customers conduct business outside the U.S. while non-U.S. based customers also conduct considerable business in the U.S. Community banks will be less affected because they compete in limited geographic markets, but their customer base is changing with the changing U.S. demographics, such that they too will need to be aware of global issues, global payment systems, and the needs of customers from different cultures. Chapter 2 Analyzing Bank Performance: Using the UBPR1. For a large bank, assets consist approximately of marketable securities (20%), loans (70%), and other assets (10%). Liabilities consist of core deposits (40%60%), noncore, purchased liabilities (20%40%), and other liabilities (5 %10%) as a fraction of assets. Small banks typically obtain more funds in the form of core deposits and less in the form of noncore, purchased liabilities. Small banks often invest more in securities as well. Of course, the actual percentages for any bank depend on that banks business strategy, market competition, and ownership.2. A bank's interest income consists of interest earned on loans and securities while noninterest income includes revenues from deposit service charges, trust department fees, fees from nonbank subsidiaries, etc. Interest expense consists of interest paid on interest-bearing core deposits and noncore liabilities while noninterest expense is comprised of overhead costs, personnel costs, and other costs. A banks net interest income equals its interest income minus interest expense. Note that interest income may be calculated on a taxequivalent basis in which taxexempt interest is converted to its pretax equivalent. A banks burden is defined as its noninterest expense minus noninterest income. This is often quoted as a fraction of total assets. A banks efficiency ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income. The denominator effectively measures net operating revenue after subtracting interest expense. The efficiency ratio measure the noninterest cost per $1of operating revenue generated. Analysts often interpret the efficiency ratio as a measure of a banks ability to control overhead relative to its ability to generate noninterest income (and overall revenue). A lower number is presumably better because it reflects better cost control compared with revenue generation.3.Income statementInterest on U.S. Treasury & agency securities $44,500Interest on municipal bonds 60,000Interest and fees on loans189,700Interest income =$294,200Interest paid on interest-checking accounts$33,500Interest paid on time deposits under $ 100,00072,000Interest paid on jumbo CDs101,000Interest expense =$206,500Net interest income = $87,700Provisions for loan losses =$ 18,000Net interest income after provisions =$68,700Fees received on mortgage originations$23,000Service charge receipts 41,000Trust department income15,000Noninterest income =$79,000Employee salaries and benefits$145,000Occupancy expense 22,000Noninterest expense =$167,000Income before income taxes$19,300Income taxes6,562Net income =$12,738Cash dividends declared2,500Retained earnings =$15,238This assumes that expenses associated with the purchase of the new computer are included in occupancy expense. If not, the computer expense (depreciation) will increase the loss for the period. Also, the bank can receive a tax refund from prior tax payments if the bank made a taxable profit within recent years.4.The primary risk faced by banks are credit risk, liquidity risk, interest rate risk, foreign exchange risk (the latter two represent market risk), operational risk, and capital solvency. In general, promised, or expected, returns should be higher for banks that assume increased risk. There should also be greater volatility in returns over time.a. Credit risk: Net loan chargeoffs/LoansHigh risk high ratio; Low risk low ratioHigh risk manifests itself in occasional high charge-offs, which requires above average provisions for loan lossses to replenish the loan loss reserve. Thus, net income is volatile over time.b. Liquidity risk: Core deposits/AssetsHigh risk low ratio; Low risk high ratioHigh risk manifests itself in less stable funding as a bank relies more on noncore, purchased liabilities that fluctuate over time. These noncore liabilities are also higher cost, which raises interest expense.c. Interest rate risk: (|Repriceable assetsrepriceable liabilities|)/AssetsHigh risk high ratio; Low risk low ratioHigh risk banks do not closely match the amount of repriceable assets and repriceable liabilities. Large differences suggest that net interest income may vary sharply over time as the level of interest rates changes.d. Foreign exchange risk: Assets denominated in a foreign currency minus liabilities denominated in the same foreign currency. High risk a large difference; Low risk a small difference High risk manifests itself when exchange rates change adversely and the value of the banks net position of assets versus liabilities denominated in a currency changes sharply.e. Operational risk: total assets/number of employees High risk low ratio; Low risk high ratio High risk manifests itself when the bank operates at low productivity measured by more employees per amount of assetsf. Capital/solvency risk: Stockholders equity/AssetsHigh risk low ratio; Low risk high ratioHigh risk manifests itself because fewer assets must go into default before a bank is insolvent and can be closed down by regulators.5.ROE = net income/stockholders' equityROA = net income/total assetsEM = total assets/stockholders' equityER = total operating expense/total assetsAU = total revenue/total assets Balance sheet figures should be measured as averages over the period of time the income number is generated.ROE = ROA x EM ROA = AU ER TAX where TAX = applicable income tax/total assets.6.Profitability ratios differ across banks of different size as measured by assets. The primary reasons are that different size banks have different asset and liability compositions and engage in different amounts of off-balance sheet activities. Typically, small banks report higher net interest margins because their average asset yields are relatively high while their average cost of funds is relatively low. This reflects loans to higher risk borrowers, on average, and proportionately more funding from lower cost core deposits. ROEs, in turn, are often lower because small banks operate with more capital relative to assets, that is with lower equity multipliers, so that even with comparable ROAs the ROEs are lower. Large banks ROAs are increasing faster over time because large banks operate with lower efficiency ratios as they have been more successful in generating fee income. 7.CAMELS a. C =capital adequacy: equity/assets b. A = asset quality: nonperforming loans/loans; loan chargeoffs/loans c. M = management: no single ratio is good, although all ratios indicate overall strategy d. E = earnings: aggregate profit ratios; ROE, ROA, net interest margin, burden, efficiency e. L = liquidity: core deposits/assets; noncore, purchased liabilities/assets; marketable securities/assets f. S = sensitivity to market risk; |repriceable assets-repriceable liabilities|/assets; difference in assets and liabilities denominated in the same currency。8.Lowest to highest liquidity risk: 3month Tbills, 5year Treasury bond, 5year municipal bond (if high quality and from a known issuer), 4year car loan with monthly payments (receive some principal monthly, may be saleable), 1year construction loan, 1year loan to individual, pledged 3-month T-bill. As stated, the 3month Tbill that is pledged as collateral is illiquid unless the bank can change its collateral status.9.Comparative credit riska. loan to a comer grocery store representing a little known borrower with uncertain financialsb. loan collateralized with inventory (work in process) because the collateral is less liquid and more difficult to value; this assumes that the receivables are still viable and not too aged.c. normally the Barated municipal bond, unless the agency bond is an "exotic" mortgage backed security, because the agency bond carries an implied guarantee in that Freddie Mac is a quasi-public borrower.d. 1year car loan because the student loan is typically government guaranteed10.For the balance sheet: high core deposits/assets; high equity/assets; low noncore, purchased liabilities/assets; high investment securities/assets; high agriculture loans/assets (the value refers to that for small banks); For the income statement: net interest margin (high); burden/assets (high), efficiency ratio (high); (the value in paretheses refers to that for small banks). Chapter 3 Managing Noninterest Income and Noninterest Expense1. Unmonitored expenses can become excessively high. If a bank has nothad a plan to control expenses,then cost cutting is appropriate and will help the bank be more competitive. Often times cost cutting simply means letting people go. However, such expense cuts can adversely affect the banks ability to provide service and compete. Managers should approach cost cutting with operating efficiencies in mind, selecting expenses that will lower the average cost of providing services. In some cases, banks will have to invest in new technologies to improve productivity as an alternative to simple cost cutting.2. The primary sources of noninterest income for a community bank are generally deposit fees, trust fees, mortgage fees, fees and commissions and fees from insurance produces, credit card fees and investment product fees. The primary sources of noninterest income for large Global, Nationwide, and Super Regional Banks are deposit fees, investment banking fees, asset management fees, mortgage servicing fees, and trading profits.3. Noninterest expense consists of personnel expense, occupancy expense (including rent and de