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Record W301886771

Banking Vital Signs Now vs. 1988-90

2009· article· en· W301886771 on OpenAlex
Mako Parker

Why this work is in the frame

A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.

aboutThe title or abstract carries a Canadian signal from the geographic lexicon.
no affNo Canadian affiliation: this work is invisible to an affiliation-only frame.
No Canadian affiliation. An affiliation-only frame, the usual design, would never have seen this work. It is one of the works that make the case for inverting the frame.

Bibliographic record

VenueABA banking journal · 2009
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicBanking stability, regulation, efficiency
Canadian institutionsnot available
Fundersnot available
KeywordsRecessionRevenueLoanProvisioningBusinessQuarter (Canadian coin)Business cycleBanking industryEconomicsMonetary economicsFinancial systemFinanceEngineeringMacroeconomics
DOInot available

Abstract

fetched live from OpenAlex

As the banking industry makes its way through the economic downturn, it's useful to put the situation in perspective by comparing industry performance in the current recession to that of the banking problems in the late 1980s to early 1990s. At present, the situation looks to be relatively better. Further examination reveals a strong foundation compared to the previous period. [ILLUSTRATION OMITTED] Higher provisioning, higher reserves Despite Federal Reserve Chairman Ben Bernanke's recent statement that the recession has likely ended, many banks are expecting more delinquencies. In second quarter of 2009, 4.4% of industry loans were 90 days past due or in nonaccrual status. Although on par with the peak levels reached in 1987 and 1990, the trend line today has yet to show signs of peaking. It follows, then, that banks have had to provision more against loan losses. During the current cycle, the ratio of two-year average provisions to net charge-off reached 169% as of June 2009, compared to 150% as of December 1990. Loss provisions to net operating revenue also show the banking industry provisioning a higher percentage of dollars in this down-cycle than in the past. In the last two years, the industry provisioned on average 28% of net operating revenue compared to the average two-year provisioning in 1990 of 20%. Due to the aggressive buffering, the industry is now better reserved than it has been in the last 30 years. As the industry grew during the strong economic period of the middle 2000s, reserve ratios generally fell. However, this was due to lending portfolios expanding to keep up with demand. Now, banks are reserving more than in the past--up to 2.8% of their portfolios. The unloading of bad loans and tightening of lending standards have also contributed to the rise in reserve ratios. Stronger capital One of the other most noticeable differences between this period and the last is the higher levels of capital held by banks. As the table below demonstrates, the industry increased its holdings in all categories of capital. Moreover, there is broad evidence that banks of all asset sizes generally hold more capital now as compared to the earlier year. This stronger capital base, coupled with greater reserves, has allowed banks to better absorb the shock of the current financial crisis. This goes a long way toward explaining why bank failures, while continuing, are way down in number as compared to the earlier period. Industry profitability The strong provisioning for losses has taken its toll on bank income. Over a three-year period ending in the second quarter 2009, the percentage of banks that had negative net income rose from 7% to over 25%. In comparison to the late 1980s to early 1990s, the level of non-profitable banks is higher and ramped up more quickly than in the previous cycle. As a result, industry return-on-assets has fallen to lows last seen in the 1980s--after nearly two decades of holding over one percent. …

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.002
metaresearch head score (Gemma)0.000
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesMeta-epidemiology (narrow), Insufficient payload (model declined to judge)
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: Theoretical or conceptual
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.110
Threshold uncertainty score1.000

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0020.000
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0010.000
Bibliometrics0.0010.001
Science and technology studies0.0010.000
Scholarly communication0.0010.001
Open science0.0010.000
Research integrity0.0000.001
Insufficient payload (model declined to judge)0.0020.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.020
GPT teacher head0.231
Teacher spread0.211 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it