No questions on banks for IPS section noticed, question, individual, foundation

pimpineasy

Anyone noticed how there havent been any questions on IPS for banks? models seems to be one on individual cases then a case for pension fund or foundation / endowment..is it time for a bank question?

bpdulog

Banks

Return = Positive net interest spread
Risk = Low risk tolerance due to short term liabiltiies
Time Horizon = short term (3-5 years?)
Liquidity = High as must meet short term loans
Taxes = Taxable entities
Regulatory = Highly regulated, valuation criteria's + asset reserves
Unique = Geographical risk / concentration

Am I forgetting anything??

Analti_Calte

Banks make loans (so loans are assets for banks). Bank liabilities are deposits. Thus, banks have a high liquidity need because of deposits that can be demanded at any time by depositors such as you and I.

In short, banks borrow short and lend long = high need for liquidity.

Chuckrox

ALM, LADG.

And the securities portfolio is used to {...}

IAmNeil

deriv108 Wrote:
-------------------------------------------------------
> ALM, LADG.
>
> And the securities portfolio is used to {...}

{manage the duration difference between its assets and liabilities (Equity) }