Bank Accounting & Finance articles from December 1999

Bank Accounting & Finance archives from December 1999

Making Strategic Use of Customer Information.
December 22, 1999... The ability to understand customer profitability is a crucial characteristic for success in information-rich markets, like the financial services industry. Writing in Sloan Management Review (Summer 1999), Rashi Glazer described a number of...

Getting the Most Out of Your Asset/Liability Systems.
December 22, 1999... It is sometimes said that organizations and people don't plan to fail; they just fail to plan. These words apply with particular force to the asset/liability (A/L) management problem in banking. True, banks are not failing in the literal sense...

Measuring Interest-Rate Risk from an Earnings and an Economic Value Perspective.
December 22, 1999... One of the central issues in asset/liability management at banks and S&Ls is managing interest-rate risk associated with long-lived, nontradable assets and liabilities accounted for on an accrual basis. The two methods for measuring...

Strengthening Capital Investment Decision-Making.
December 22, 1999... Last year, the banking industry approved capital investments totaling an estimated $20 billion, about half of which was earmarked for information technology (IT). Yet, even major banks find it increasingly difficult to determine whether the...

Financial Services Modernization Legislation: One for the Century, If Not for the Ages.
December 22, 1999... On November 12, 1999, the President signed into law the Gramm-Leach Bliley Act, which modernizes the financial services industry. Such legislation has been considered by previous Congresses and administrations as well as sought by financial...

Stock Repurchase Programs: Economic Principles.
December 22, 1999... Share repurchases are purchases of shares in a corporation by the corporation's own treasury. Repurchase programs have become increasingly popular in recent years among many publicly traded corporations, especially large banks. 0f 47 publicly...

What You Need to Know Before Buying a Relationship Profitability System.
December 22, 1999... With the technology explosion of the last decade, financial institutions are able to store and process greater amounts of data on PCs. This makes it easy to deliver relationship profitability information to practically all levels of decision...

Using Customer Profitability Data to Improve Financial Performance.
December 22, 1999... More than half of U.S. banks are using a customer profitability measurement system to calculate the net income produced by each customer relationship, remarkable penetration considering the concept was virtually unheard of just a few years ago....

New Developments on Loan-Loss Reserves: An Update.
December 22, 1999... It has been more than a year since the Securities and Exchange Commission (SEC) first announced that it was concerned with the loan-loss reserve practices of financial institutions. In that time, we have seen numerous joint statements and...

Proposed FASB Statement: Business Combinations and Intangible Assets.
December 22, 1999... On September 7, 1999, the Financial Accounting Standards Board (FASB) issued a Proposed Statement of Financial Accounting Standards, "Business Combinations and Intangible Assets" (proposed statement). The proposed statement, if approved in its...

Bad-Debt Conformity Election Revisited.
December 22, 1999... Some years ago this column addressed the then-newly issued regulations under Section 166 dealing with the conformity election available to banks for accounting for bad debts ("Proposed Regulations Should Clarify Tax Repercussions of Debt...

Staff Accounting Bulletin Addresses Concept of Materiality in Financial Statements.
December 22, 1999... The staff at the Office of the Chief Accountant of the Securities and Exchange Commission (SEC) issued 15 Staff Accounting Bulletin (SAB) No. 99, "Materiality" in August 1999. The statement addresses the application of materiality thresholds to...

Reward Executives for Creating Shareholder Value.
December 22, 1999... For years, many industrial companies have been measuring performance and rewarding executives based on economic profits. Only recently, banks and other financial institutions have begun to use these methods to link economic value to...