Commercial Banks-Industry Overview- From SC3-Chapters 11&13 part3

Commercial Banks-Industry Overview- From SC3-Chapters 11&13 part3

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
3/17/11 Some Simple Benchmarks The Taylor Monetary Policy Rule: where i denotes the targeted short-term nominal interest rate denotes the current inflation rate π r* denotes the equilibrium real Fed Funds Rate y denotes the log of actual and potential (as determined by a linear trend) Real GDP ) ( ) ( _ * * t t y t t t t t y y a a r i - + - + + = π π π π inflation gap output gap target rate potential RGDP
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
3/17/11 Some Simple Benchmarks The Taylor Monetary Policy Rule: Taylor assumes that the equilibrium real FED Funds Rate is 2% Taylor also assumes that the target rate of inflation is 2%.
Image of page 2
3/17/11 Monetary Policy Key Feature is the Monetary Policy Lag estimated to be between 9 months and 1.5 years compare to estimated fiscal policy lag of 12 months to 5 years Requires intermediate and short-term targets to monitor progress
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
3/17/11 Deposit Insurance
Image of page 4
3/17/11 Risk Based Deposit Insurance Deposit Insurance Premiums are based on Bank’s Risk Rating Bank’s capitalization
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
3/17/11 Risk Categories determined by CAMELS rating capital adequacy asset quality management quality earnings liquidity interest rate sensitivity Rating in each category
Image of page 6
3/17/11 Risk Categories Depending on the bank’s risk rating it is placed in one of three categories Risk Category A : CAMELS Rating =1 & 2 Risk Category B : CAMELS Rating = 3 Risk Category C : CAMELS Rating =4 & 5
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
3/17/11 Minimum Capital Requirements across Capital Categories *Total Capital = Tier 1 + Tier 2 Capital
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern