Following the Global Financial Crisis of 2007-2008, financial institutions faced regulatory changes due to inherent weaknesses that were exposed by the recession. Within the United States, regulation came via the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which was heavily influenced by the internationally focused Basel III accord. A key component to both of these sets of regulations focused on raising the capital requirements for financial institutions, as well as creating capital buffers to help protect solvency during economic downturns in the future. The goal of this study is to evaluate the effectiveness of these changes to capital requirements, and to hypothesize as to what would happen if the modern banking system experienced the COVID-19 pandemic recession with the capital and leverage levels of the banking institutions circa 2007. To accomplish this, data from the Federal Reserve describing the capital and leverage ratios of the banking industry will be evaluated during both the Global Financial Crisis of 2007-2008, as well as during the COVID-19 Recession. Specifically, we will look at by how much capital was improved due to Dodd-Frank/Basel III, the resiliency of the capital and leverage ratios during the modern COVID-19 recession, and we will look at the average drop in capital levels caused by the COVID-19 recession and apply these percentage changes to the leverage/capital levels seen in 2007. Given the results, it is clear to see that the change in capital requirements along with the counter-cyclical buffers described in Dodd-Frank and Basel III allowed the banking system to function throughout the COVID recession without approaching insolvency in the slightest, something that ailed many large banks and firms during the Global Financial Crisis. As an answer to our hypothetical, we found that the drop seen affecting the measures of bank capital experienced during the COVID pandemic when applied to values seen at the beginning of the 2007 recession still led to a well-capitalized banking industry as a whole, highlighting the resiliency seen during the COVID recession thanks to the capital buffers put in place, as well as the direct assistance provided by the federal government (via PPP loans and stimulus checks) and the Federal Reserve in keeping the hit on capital to minimal values throughout the pandemic.
The Applied Learning Thesis is a Barrett, the Honors College thesis project in which one uses something going on in their daily lives and apply it toward a thesis project. For my project, I am using my current position as a Customer Experience Representative (CER) at BMO Harris Bank to determine whether or not the teller position is necessary in the current landscape of retail banking. Using interviews from individuals related to the industry, research primarily from internet sources, and real data given by BMO Harris Bank representatives, I will try to determine what direction future of the teller position seems to be heading.
本文通过案例分析与实证相结合的方式来解答上述问题。在案例分析部分,分别就银行拓展信托业务和保险业务两个方面展开分析,具体来说,在拓展信托业务方面,以浦发银行收购上海信托为案例分析了浦发银行开拓信托业务后对其经营绩效的影响;在拓展保险业务方面,以北京银行并购首创安泰为例,分析银保混业对北京银行带来的协同效应。在实证分析部分,首先,基于相关的理论以及文献提出三个假说:银行实施混业经营战略,可以提高银行的绩效水平;混业经营通过提高银行规模,增强规模经济优势,促进银行的绩效水平较高;混业经营会提高银行势力水平,从而提升银行的绩效水平。其次,建立回归模型来验证上述三个假说,研究了是否混业以及混业经营的程度对银行绩效的影响。最后,构建中介效应模型验证混业经营作用于银行绩效的渠道,本文主要检验了规模、市场势力两个渠道。
综合上述分析,本文认为混业经营会显著正向影响公司业绩,并且银行势力存在显著的中介传导效应,即银行通过混业经营增加了市场势力、提高了规模经济,从而影响了公司业绩。
案例分析结果支持上述结论,即混业经营会带来银行经营绩效的提升,但是同时也可能会带来短期的风险。
银行是否需要采取混业经营需要根据自身的经营情况,不能盲目扩张。业务的拓展需要与自身现有的业务形成互补,才能实现协同发展效应。在拓展业务的同时,需要注意开拓新的业务是否会给自身带来更多的经营风险。
关键词:混业经营;银行绩效;市场竞争;银行势力
In the end, an increase in repurchases of company stock will also influence the rate of dividends to increase. This means, an investor should not necessarily worry about the dividends they receive, but rather to see if the company is making profit at a consistent rate and reinvesting into value-added activities. Through the major pillars of finance, technology, legal, and human resources, the budget for reinvestment can be optimized by investing into these respective categories with percentages that are mindful of the specific companies needs and functions. Any firm that chooses to ensure proven methods of growth will enact a combination of these four verticals. A larger emphasis on finance will branch out efficiency in the entire organization, as finance control everything from the toilet paper to the acquisitions the company is making. The more technology is used to reduce redundancy and inefficient or costly operations, the more capability the organization will have. IT, however, comes with its technical challenges; having a team on-hand or even outsourced, to solve the critical problems to help the business continue operation. Over-reliance into technology can be detrimental to a business as well if clear processes are not set about straight to counteract problems the business will face like IT ticketing systems or recovery and continuity support. Therefore, technology will require a larger chunk of attention as well.
The upcoming legal and HR investments a company will make will depend upon its current position and thus the restructuring will differ for every firm. Each company has its own flavour and style of work. In that regard, the required legal counsel will vary; different problems will require different solutions for risk control and management, which are often professionally advised by intelligent corporate counsel. This ability to hire efficient legal counsel would not arise in the first place if a firm were to give out dividends; the leftover profit would have gone towards the shareholders and not back into growing the equity of the business. Lastly, nothing is possible without the contribution of people, and their efforts. A quality that long-lasting, successful businesses have, is they are investing in their people and development. Paying salaries, insurances, bonuses, all requires extra capital that is needed to be set aside in order to grow human capital. Good people, better people. There are qualities for each role that need to be defined and a process for attracting talent needs to be invested in. This process can also include outsourcing to an external firm who specializes in these strategies. By retaining profits internally, the company is able to stretch its legs to have further reach upon the market they work in. Financially and statistically, dividends are likely to grow as well with the increase in equity due to the increase in security an investor feels with more cash reserve and liquidity within the company.
All in all, a company should not be pressured into giving out periodic payments in predetermined timeframes, in other words a dividend, to investors even when they are insisting. Rather, pitch and prove, a new method for reinvestment within the company that will raise the value of the company, through proven methods like the value chain model, to increase the equity in the company. By expanding the scope and capability, the company is allowing for a larger target market which will reap more benefits; none of it would be possible if it had continued to give out large percentages of capital to investors as dividends. Companies, and investors, should not be worried about dividends at all as a matter of fact; an increase in stock buyback, in other words reinvesting into the company, will increase the rate of dividends anyway, due to increased confidence and capital within the company.