This is “Bank Management”, chapter 9 from the book Finance, Banking, and Money (v. 2.0). For details on it (including licensing), click here.

For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. You may also download a PDF copy of this book (11 MB) or just this chapter (980 KB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline).

Has this book helped you? Consider passing it on:
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you. helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.

Chapter 9 Bank Management

Chapter Objectives

By the end of this chapter, students should be able to:

  1. Explain what a balance sheet and a T-account are.
  2. Explain what banks do in five words and also at length.
  3. Describe how bankers manage their banks’ balance sheets.
  4. Explain why regulators mandate minimum reserve and capital ratios.
  5. Describe how bankers manage credit risk.
  6. Describe how bankers manage interest rate risk.
  7. Describe off-balance sheet activities and explain their importance.