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A Model of Commercial Bank Earning Assets Selection

Published online by Cambridge University Press:  19 October 2009

Randall B. Haydon  and
John H. Wicks
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Extract

Economists have long been creating models by which to describe optimum behavior for firms to maximize profits. The rigor and inclusiveness of such models have increased steadily in recent years. In the field of commercial banking, however, this has not generally been the case. Concerning the topic of asset management, the typical analyst discusses the decisions to be faced by the bank manager, the reasons for the problems involved, and considerations to include in the solution of such problems. Often, specific rules-of-thumb for the handling of individual asset accounts are advocated.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 1 , Issue 2 , June 1966 , pp. 99 - 113
Copyright
Copyright © School of Business Administration, University of Washington 1966

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References

1 Cf. Robinson, Roland I., The Management of Bank Funds (New York: McGraw-Hill Book Company, Inc., 1962).Google Scholar

2 Cf. Crosse, Howard D., Management Policies for Commercial Banks (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1962), pp. 78–90Google Scholar; Lyon, Roger A., Investment Portfolio Management in the Commercial Bank (New Brunswick, N.J.: Rutgers University Press, 1960Google Scholar); Reed, Edward W., Commercial Bank Management (New York: Harper and Row, 1963Google Scholar).

3 Even if these items could not be readily determined, assumptions of their magnitude must be made if any type of rational decision making process is to be used.

4 Aldeheff, David A. and Aldaheff, Charlotte P., “An Integrated Model for Commercial Banks,” The Journal of Finance (March 1957), p. 25.Google Scholar