Abstract
We have discussed virtually all funding sources for banks and bank holding companies – except the capital accounts, to which we shall return in Chap. 5. But first, we are interested in examining the kinds of assets which banks would typically hold, focusing on the earning assets – investments and loans.
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Notes
- 1.
Of the roughly $16.8 trillion of Treasury securities outstanding at March 31, 2013, $5.6 trillion is owned by foreign investors – governments, central banks, businesses, and individuals. The largest holder at this time is China, with $1.3 trillion, and the rest is spread over virtually every other country in the world.
- 2.
Treasury Decides to Offer Floating-Rate Notes,” The Wall Street Journal, 2 Aug. 2012, p. C-3. Also, “Treasury is Readying Floating-Rate Debt,” The Wall Street Journal, 2 May, 2013, p. C-3.
- 3.
See “Risk Builds as Junk Bonds Boom,” The New York Times, August 16, 2012, page B-1.
- 4.
The Gini Coefficient measures income equality on a scale of 0 to 1, in which 0 represents perfect equality, and 1 is perfect inequality. Most industrial countries were in the range of 0.2 to 0.3 in 2010. The United States stood at 0.47, the highest level of inequality among all industrialized nations. Source: The U.S. Central Intelligence Agency, World Factbook, 2010, ibid. (www.cia.gov/library/publications/the-world-factbook/fields/2172/html).
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Wallace, W.H. (2013). How Do Banks Use Their Funds? The Asset Side of the Balance Sheet. In: The American Monetary System. Springer, Cham. https://doi.org/10.1007/978-3-319-02907-8_4
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