Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Boston
New England Economic Review
Innovations in performance measurement in banking
Ralph C. Kimball
Abstract

In banking over the past 10 years, management accountants have been instrumental in the creation of new management processes and performance systems. Their innovations have enabled banks to create internal capital markets, measure risks so as to facilitate their proper hedging and pricing, and create risk-based performance standards for lines of business. They have also made great progress in creating data bases and analytical tools to resolve strategic conflicts.> This article discusses the evolution of commercial banks into semiautonomous lines of business and the managerial issues and challenges that this organizational change has created. It goes on to describe the development of funds transfer systems, the allocation of risk-based capital, and the creation of risk-adjusted hurdle rates. Unresolved issues in bank management are also reviewed, such as the problem of "adding up" in the allocation of capital, the valuation of customer relationships, and the creation of objective measures of credit risk.


Download Full text
Download Full text
Cite this item
Ralph C. Kimball, "Innovations in performance measurement in banking" , Federal Reserve Bank of Boston, New England Economic Review, issue May, pages 23-38, 1997.
More from this series
JEL Classification:
Subject headings:
Keywords: Banks and banking - Ratio analysis
For corrections, contact Catherine Spozio ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal