Bank Investment: Characteristics, Objectives, Functions, Policy

Investment and loans are the two strategies for the utilization of bank funds. Although the main purpose of these two strategies is to earn a profit, they have many dissimilarities also. Meaning and Definition of Bank Investment Investment is using money to make more money to gain income, increase capital, or both. The term investment…

Investment Strategies of Commercial Banks

Investment is mainly made to generate income. Meet up the liquidity requirement is another purpose of investment. Commercial banks must maintain adequate capital according to the guidelines of the bank regulatory authority. Commercial banks invest in different types of securities according to the guidelines of the bank regulatory authorities to reduce the weighted average risk…

Security Investment: The Emergence of Security Investment

Security investment means investing in financial instruments that hold value in the economy, are legally backed by a financial institution or business, and can be traded between parties. The emergence of Security Investment This attitude of the commercial banks started changing during World War I. Because of the need for a huge quantity of war…

Managing of Bank Investment Portfolio [18 Factors]

Investment officers should not purchase those investment portfolios that bring losses to the bank. Now the question is whether the investment officer purchases the portfolio which offers neither profit nor loss or little profit while they have the opportunity of purchasing profitable investments. The answer is; if there is a high possibility of profit from…

Changes of Interest Rate Over Business Cycle

Commercial Banks are traditionally known as lending institutions. Making loans to business houses and industrial enterprises has been their popular activity. But recently, banks have departed considerably from their popular activity by making finances to speculators & dealers in securities, consumers, real estate businesses, and so on. In general, the dealing in bonds & securities…