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Balance Sheet and Income Statement Comparison

Birds eye-view of the Balance Sheet and Income statement. Please remember its very high level comparison.   Balance Sheet and Income Statement Comparison Manufacturing Financial Services Assets Cash Cash Accounts Rec Investments Inventory Loans Fixed Assets Bldg’s Liabilities Accounts Payables Deposits Long Term Debt Savings Equity Other Borrowings Capital  Inc/Exp Sales Total Int. Income COGS Total. […]

Treasury: Basel/Cash flows/Credit Ratings/Collateralized Financing

Continuing from previous Treasury Article ……. 1.4   Cash flows from Operating, Investing and Financial Activities Traditional methods of cash flow analysis with emphasis on net earnings and net assets have little meaning to global banks except for identifying some macro trends within their businesses. These banks evaluate funding and liquidity positions and policies quite differently […]

Treasury Management: Liquidity, Funding, Risk

The central management of funding, liquidity, capital and foreign exchange exposures in a global operations bank come under the preview of its Treasury.  These activities are overseen by a Capital Allocation and Risk Management Committee  or a similar group which generally includes the Chief Executive, Chief Financial Officer, Chief Risk Officer and the Treasurer. Monitoring […]

Risk and Funds Transfer Pricing

Assuming the risk measures to be adopted are specified, how would you proceed to allocate them to different department of the Organization? A Bank may pursue an income rate risk strategy of organizing its cash flows so as to generate cash to its shareholders in a similar manner as a sequential investment in (say) a […]

Risk Measurement – Traditional Banks vs Investment Banks

What should be the basis of measurement? Should we base it on the volatility of the mark-to-market value of a given portfolio, or else in terms of net income volatility? Before we try to answer the question it is important to appreciate that the approaches that banks take for a specific risk measurement differ from […]

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