Public merger announcements often state which type of merger accounting, pooling or purchase, has been employed. The choice can strongly influence accounting results. For example, reported earnings are often higher under pooling than purchase accounting. Yet empirical analysis indicates that the...

The author describes the fair lending laws and how they are enforced. He then compares such enforcement with the corresponding enforcement of antidiscrimination laws in employment and housing. The comparison reveals that the current practice of routine examination of every bank for signs of...

Banks may receive a subsidy from deposit insurance or from other components of the government-provided banking safety net. Extension (leakage) of a subsidy to banks' nonbank affiliates will only serve to enlarge it. But subsidy enlargement, since it entails expanded risks to taxpayers and...

Recent years have seen bank loan losses exceeded only by those of the Great Depression. This experience, along with tax and regulatory changes, has triggered changes in the reserve account through which banks provide for such losses

Since the banking crisis of the early 1930s, laws and regulations have restricted banks' transactions with their nonbank affiliates. These restrictions, commonly known as firewalls, are meant to prevent the spread of financial difficulties within a banking company. In certain circumstances,...

Reduced provisions for loan losses in 1988 boosted bank profits in the Fifth District and nationwide. Profit ratios also may have been influenced somewhat by subsidiary banks' payment of management fees to their holding companies

During the early 1990s, some accused examiners of being too strict with banks in New England and California, thus contributing to economic difficulties in those regions. When measures of examiner strictness are analyzed, however, no evidence of strictness is found. To the contrary, banks in New...

Movements in the monetary aggregates affect the price level, interest rates, real output, and employment. For that reason they are among the most closely-watched financial statistics. This article provides a practical introduction and guide to the various monetary aggregates

Although the profitability of U.S. small banks shrank in the 1980s, two percent of these banks remained highly profitable by emphasizing basic banking, namely acquiring low-cost funds and making low-risk investments

Gains from sales of securities and lower loan loss previsions helped bring higher profits to large Fifth District commercial banks in 1986. At the same time, small- and medium-sized bank profits fell slightly in the District from the previous year. As in the past few years, Fifth District banks...