Valuing Banks In Uncertain Times
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Valuing Banks In Uncertain Times
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Author : Dr Natalie Schoon
language : en
Publisher:
Release Date : 2009
Valuing Banks In Uncertain Times written by Dr Natalie Schoon and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Banks and banking categories.
The main question the book addresses is whether it is possible to determine the value of banks in general and Islamic banks in particular using generally available valuation models. But does this still hold in the current uncertain times? Questions that w.
Valuing Banks In Uncertain Times
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Author : Natalie Schoon
language : en
Publisher: Spiramus Press Ltd
Release Date : 2010
Valuing Banks In Uncertain Times written by Natalie Schoon and has been published by Spiramus Press Ltd this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Business & Economics categories.
The main question this book addresses is whether it is possible to determine the value of banks in general and Islamic banks in particular using generally available valuation models. But, does this still hold in the current uncertain times? The book - now in paperback - examines the suitability of price as the right benchmark, the impact of market psychology, and the accuracy of future cash flow estimations. Over the years, numerous academics and practitioners have looked into the valuation of companies and the different techniques that can be applied. Discounted cash flow, residual income, and economic value added (EVA) are only a few of the techniques that have been researched extensively. Typically, these cover either a specific industry, or a large diverse set of listed companies, but, without exception, exclude financial institutions. The reasons for this exclusion are simply that the characteristics are different from other industries and the fact that financial institutions, specifically banks, are notoriously difficult to value. But are they really that difficult to value and if so, why? As a result of the global growth of the Islamic banking industry, it becomes increasingly important to be able to determine the value of Islamic banks and compare their ability to create value with other banks in the industry. For Islamic banks, the estimation of parameters differs, amongst other reasons, due to the different balance sheet structure and the lack of availability of market data.
Valuing Banks
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Author : Federico Beltrame
language : en
Publisher: Springer
Release Date : 2016-06-27
Valuing Banks written by Federico Beltrame and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-06-27 with Business & Economics categories.
This book aims to overcome the limitations the variations in bank-specifics impose by providing a bank-specific valuation theoretical framework and a new asset-side model. The book includes also a constructive comparison of equity and asset side methods. The authors present a novel framework entitled, the “Asset Mark-down Model”. This method incorporates an Adjusted Present Value model, which allows practitioners to identify the main value creation sources of a particular bank: from asset-based cash flow and the mark-down on deposits, to tax benefits on bearing liabilities. Through the implementation of this framework, the authors offer a more accurate and more specific approach to valuing banks.
Banks And Shareholder Value
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Author : Stephanie Gross
language : en
Publisher: Springer Science & Business Media
Release Date : 2007-11-06
Banks And Shareholder Value written by Stephanie Gross and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-11-06 with Business & Economics categories.
Stephanie Gross focuses on three sets of questions on shareholder value of banks and analyses its measurement, empirical relevance and value drivers.
Investment Banking
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Author : Joshua Rosenbaum
language : en
Publisher: Wiley Finance
Release Date : 2009
Investment Banking written by Joshua Rosenbaum and has been published by Wiley Finance this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Business & Economics categories.
Mark Twain, long known for his critical views of formal education, once wisely noted: “I never let my schooling interfere with my education.” Twain’s one-liner strikes at the core of investment banking, where deals must be lived before proper knowledge and understanding can be obtained. Hard time must be spent doing deals, with complexities in valuation, terms, and negotiations unique to every situation. The truly great firms and dealmakers have become so by developing cultures of apprenticeship that transfer knowledge and creativity from one generation to the next. The task of teaching aspiring investment bankers and finance professionals has been further complicated by the all-consuming nature of the trade, as well as its constantly evolving art and science. Therefore, for me personally, it’s exciting to see Joshua Rosenbaum and Joshua Pearl take the lead in training a new generation of investment bankers. Their work in documenting valuation and deal process in an accessible manner is a particularly important contribution as many aspects of investment banking cannot be taught, even in the world’s greatest universities and business schools. Rosenbaum and Pearl provide aspiring—and even the most seasoned—investment bankers with a unique real-world education inside Wall Street’s less formal classroom, where deals come together at real-time speed. The school of hard knocks and of learning-by-doing, which was Twain’s classroom, demands strong discipline and sound acumen in the core fundamentals of valuation. It requires applying these techniques to improve the quality of deals for all parties, so that dealmakers can avoid critical and costly mistakes, as well as unnecessary risks. My own 35 plus years of Wall Street education has clearly demonstrated that valuation is at the core of investment banking. Any banker worth his salt must possess the ability to properly value a business in a structured and defensible manner. This logic and rationale must inspire clients and counterparties alike, while spurring strategic momentum and comprehension into the art of doing the deal. Rosenbaum and Pearl succeed in providing a systematic approach to addressing a critical issue in any M&A, IPO, or investment situation—namely, how much is a business or transaction worth. They also put forth the framework for helping approach more nuanced questions such as how much to pay for the business and how to get the deal done. Due to the lack of a comprehensive written reference material on valuation, the fundamentals and subtlety of the trade are often passed on orally from banker-to-banker on a case-by-case basis. In codifying the art and science of investment banking, the authors convert this oral history into an accessible framework by bridging the theoretical to the practical with user-friendly, step-by-step approaches to performing primary valuation methodologies. Many seasoned investment bankers commonly lament the absence of relevant and practical “how-to” materials for newcomers to the field. The reality is that most xv P1: ABC/ABC P2: c/d QC: e/f T1: g FM JWBT063-Rosenbaum March 18, 2009 15:37 Printer Name: Hamilton xvi FOREWORD financial texts on valuation and M&A are written by academics. The few books written by practitioners tend to focus on dramatic war stories and hijinks, rather than the nuts-and-bolts of the techniques used to get deals done. Rosenbaum and Pearl fill this heretofore void for practicing and aspiring investment bankers and finance professionals. Their book is designed to prove sufficiently accessible to a wide audience, including those with a limited finance background. It is true that we live in uncertain and volatile times—times that have destroyed or consumed more than a few of the most legendary Wall Street institutions. However, one thing will remain a constant in the long-term—the need for skilled finance professionals with strong technical expertise. Companies will always seek counsel from experienced and independent professionals to analyze, structure, negotiate, and close deals as they navigate the market and take advantage of value-creating opportunities. Rosenbaum and Pearl promulgate a return to the fundamentals of due diligence and the use of well-founded realistic assumptions governing growth, profitability, and approach to risk. Their work toward instilling the proper skill set and mindset in aspiring generations of Wall Street professionals will help establish a firm foundation for driving a brighter economic future.
International Convergence Of Capital Measurement And Capital Standards
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Author :
language : en
Publisher: Lulu.com
Release Date : 2004
International Convergence Of Capital Measurement And Capital Standards written by and has been published by Lulu.com this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Bank capital categories.
Accounting Discretion Of Banks During A Financial Crisis
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Author : Mr.Luc Laeven
language : en
Publisher: International Monetary Fund
Release Date : 2009-09-01
Accounting Discretion Of Banks During A Financial Crisis written by Mr.Luc Laeven and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-09-01 with Business & Economics categories.
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.
Resolving The Financial Crisis
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Author : C. E. V. Borio
language : en
Publisher:
Release Date : 2010
Resolving The Financial Crisis written by C. E. V. Borio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Business enterprises categories.
How does the management and resolution of the current crisis compare with the response of the Nordic countries in the early 1990s, widely regarded as exemplary? We argue that, while intervention has been prompter, the measures taken so far remain less comprehensive and in-depth. In particular, the cleansing of balance sheets has proceeded more slowly, and less attention has been paid to reducing excess capacity and avoiding competitive distortions. In general, policymakers have given higher priority to sustaining aggregate demand in the short term than to encouraging adjustment in the financial sector and containing moral hazard. We argue that three factors largely explain this outcome: the more international nature of the crisis; the complexity of the instruments involved; and, hardly appreciated so far, the effect of accounting practices on the dynamics of the events, reflecting in particular the prominent role of fair value accounting (and mark to market losses) in relation to amortised cost accounting for loan books. There is a risk that the policies followed so far may delay the establishment of the basis for a sustainably profitable and less risk-prone financial sector.
Finding The Bad Apples In The Barrel Using The Market Value Of Equity To Signal Banking Sector Vulnerabilities
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Author : Will Kerry
language : en
Publisher: International Monetary Fund
Release Date : 2019-08-16
Finding The Bad Apples In The Barrel Using The Market Value Of Equity To Signal Banking Sector Vulnerabilities written by Will Kerry and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-08-16 with Business & Economics categories.
This paper measures the performance of different metrics in assessing banking system vulnerabilities. It finds that metrics based on equity market valuations of bank capital are better than regulatory capital ratios, and other metrics, in spotting banks that failed (bad apples). This paper proposes that these market-based ratios could be used as a surveillance tool to assess vulnerabilities in the banking sector. While the measures may provide a somewhat fuzzy signal, it is better to have a strategy for identifying bad apples, even if sometimes the apples turn out to be fine, than not being able to spot any bad apples before the barrel has been spoiled.
Usability Of Bank Capital Buffers The Role Of Market Expectations
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Author : José Abad
language : en
Publisher: International Monetary Fund
Release Date : 2022-01-28
Usability Of Bank Capital Buffers The Role Of Market Expectations written by José Abad and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-01-28 with Business & Economics categories.
Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.