|
|
Article: The danger in focusing on market value. (Managing the Balance Sheet)(Column)
- Article from:
- US Banker
- Article date:
- November 1, 1997
- Author:
CopyrightCOPYRIGHT 1997 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
There is an issue that continues to rise across the landscape of community banking in America that deserves the focused attention of every chief executive officer, director and state banking commissioner. It concerns whether market value has a useful place when it comes to measuring the financial condition of banks, and whether utilizing market value as a prime gauge of an institution's health could be highly detrimental to that institution and to the industry in general.
The Office of Thrift Supervision has, for some time, required institutions it regulates to focus on the effect that changes in prevailing rates would have on the market value of future income and ...