Italian banks and interest rate risk

Article Abstract:

The degree of exposure that 51 Italian banks have to interest rate risk (IRR) is evaluated, according to findings generated by a multiple regression model. The departure point for the research is a summation of the primary role of IRR analysis in Italy's chaotic economic environment of recent years and the development of an empirical test for IRR exposure. The second half of the research focuses on the Italian banking industry and the way interest rates are decided. For virtually all large Italian banks, the research indicates a significant hedging to the IRR. For small and medium banks, the research supports asset sensitivity. Only two of the banks included in the analysis can be considered "liability sensitive."

Italy, Risk management, Interest rates, Bank capital

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Meeting the challenge of controlling banking costs and developing pricing strategies

Article Abstract:

There has been a major shift in pricing banks' operating service fees, from fixed fees or no fees for operating services (money transfers, check collection, check disbursement, and other noncredit services) to fees expressed in terms of account size and services rendered. New pricing strategies relative to bank products and services, cost control measures related to providing such services, and the bank services market are analyzed. Customers appear to prefer the new pricing, because fees are more explicitly stated; banks prefer the new pricing strategies, because they facilitate the development of line of business cost and profit data.

Pricing, International banking, Cost control

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Commercial banks and the consumer services revolution

Article Abstract:

The consumer has been aided by deregulation of the banking industry. Consumers collected an additional $200 million in interest from Manufacturers Hanover, since there was no lid on interest rate increases during 1984. The total increase in consumers' collection of interest payments from the banking industry during 1984 totaled $10 billion, reports the Bank Marketing Association. At the same time, deregulation has worked to the advantage of banks by broadening their asset base; for example, in 1979 (prior to deregulation), banks held $13 billion in money funds, whereas in 1980 (after deregulation), banks held $43 billion in money funds.

Deregulation

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