* These theories of banking attain a very special entailment in the political economy of banking * They position banks on the foothold of market conditions such as number of banks in the market, betroth rates, information availability, financial self-directi on to the institutions, transaction costs, and nature of their banking ope rations * providing knowledge into bank behavior ?net interest margin ? ascribe crunch ? credit rationin?securitization net income involution MARGIN * explanation * gain interest margin usually is the measure of how well-off is a bank investment decision compared to its debt situation * a negative value shows that banks had had a bad investment decisions show 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 positivistic returns for that period CALCULATIONS * Net interest margin (NIM) * Total occupy 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 importance OF NIM * NIM is usually peerle ss of the main aspects in evaluating the ban! k . * caution system, evaluating what is a good solicitude and a bad one * positiveness of the bank. * optimal investment decisions by the bank * liquidness 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 variety between...If you want to get a full essay, order it on our website: OrderCustomPaper.com
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