Bank Accounting & Finance articles from October 2008

Bank Accounting & Finance archives from October 2008

Fair-value accounting, CDOs and the credit crisis of 2007-2008: complexity and model risk in the collateralized debt obligation market are severe.
October 1, 2008... Accurate valuation is the key to success in financial services. How can one know what to buy or sell without a view as to whether it is "rich" or "cheap"? Once an asset has been purchased or a loan has been made, valuation is the key to...

A practical approach to designing and executing bankwide efficiency programs: what factors separate successful and unsuccessful efficiency efforts?(Company overview)
October 1, 2008... Corporate efficiency programs are back in vogue as the banking industry responds to significant earnings challenges. These programs will become more widespread in the coming quarters as executives struggle to offset the effects on performance...

Fundamental analysis for evaluating bank performance: what variables provide the greatest insight into future earnings?
October 1, 2008... Many analysts and investors focus on a single number--net income (or earnings)--to evaluate performance. When investors attempt to forecast the market value of a firm, they frequently rely on earnings (Exhibit 1). Many institutional...

Interactive, intelligent information for financial reporting: with XBRL, information can be better processed, more actionable and more accurate.(Extensible Business Reporting Language )
October 1, 2008... Banks today use a relatively sophisticated technology standard called Extensible Business Reporting Language (XBRL) when they submit their quarterly call reports. To the bank executives themselves, the process is transparent and requires little...

Control lessons from the Societe Generale fraud: what patterns emerge from rogue trading incidents of the recent past?
October 1, 2008... The recent trading losses of roughly $7.2 billion at Societe Generale, attributed to the rogue actions of junior trader Jerome Kerviel, set a new record for losses in rogue trading incidents. The most prominent of these in the recent past have...

Why the market should set credit card interchange fees: an update and comment on legislation pending in Congress, the Credit Card Fair Fee Act.(Legislative Comment)
October 1, 2008... Credit card interchange fees have long been disdained by merchants, who now have legislative support for their scorn--in the guise of a consumer protection effort. Although years of litigation have failed to produce any court ruling that...

Market turmoil: are our models letting us down? Wise risk managers have long realized that ops risk, credit risk and liquidity risk have nonnormal distributions.(Risk Measurement)
October 1, 2008... Are our models letting us down? Certainly the unexpectedly large size of 2007 and 2008 losses might lead us to think so. Every quarter the bad news grows. The spillover of losses to U.S. municipal securities markets, not to mention the size,...

SEC proposals address credit rating agencies, technology and small business: rule changes aim to reduce undue reliance on credit ratings.(SEC Update)(Securities and Exchange Commission)
October 1, 2008... During the second quarter, the Securities and Exchange Commission (SEC) proposed several rule changes to address certain issues arising from the role of credit rating agencies, especially as a result of the SEC staff's examinations conducted...