Analysis of management

Inasmuch as management is rated on the effectiveness with which it conducts the bank's business, the responsibilities with which it is charged vary in complexity depending on the conditions inherent in any given situation. These conditions are affected by size and type of business and, for a given bank, will vary through time. Therefore, management that is competent to effectively discharge responsibilities under given conditions may be less than competent as these conditions are altered by size, type of business, or through time. Management should, then, be rated accordingly.

Management's performance is evaluated against a wide variety of objective and subjective factors. In addition to evaluating performance in light of adequacy of capital and liquidity, asset quality and profitability, management is also rated with respect to (a) technical competence, leadership, and administrative ability; (b) compliance with banking regulations and statutes; (c) ability to plan and respond to changing circumstances; (d) adequacy of and compliance with internal policies; (e) depth and succession; (f) tendencies toward self-dealing; and (g) demonstrated willingness to meet the legitimate banking needs of the community. Management is rated in accordance with the following guidelines.

Questions:

1. What are your views on this topic?

2. What is the function of bank capital?

3. What does the term gross capital funds include?

4. How can we assess risk inherent in classified assets?

5. How do we rate earnings?

6. What do you know about liquidity?

7. Do you agree that sound management equals sound banking? Explain it in more detail.

Дата добавления: 2015-07-20