us banks financial analysis and services

1. Comprehensive Source of information and Analysis on US Banks. BankVega www.bankvega.com

2. Our Services • We provide value added information and analysis of the banking sector’s financial, marketing, and strategic issues. • Our information toolkits and bankvega reports help you conduct an in-depth analysis of any bank, thrift, or credit union in the country • These reports provide excellent support tools to bank managers and analysts in their decision making. Please contact us at bankvega@gmail.com for further information and specific products or visit: www.bankvega.com www.bankvega.com

3. Two Views on Banking Crisis • A “Sunsopt” View,- The business cycle based view instead focuses on fundamental weaknesses in the economy as the key force behind a banking crisis. Under this view, economists argue that banks fail because their illiquid risky investments turn out to be bad. • A “Business Cycle”-While these two views share several common feature, there are many differences in their policy prescriptions. Under the sunspot view, the regulator should try hard to avoid a self-fulfilling prophecy. Regulations such as deposit insurance from the government are geared precisely toward avoiding such runs. www.bankvega.com

4. Risk Measures • Standard Deviation: An intutive and simple measure of risk of any portolfio (of stocks, loans, bonds for example) is simply its standard deviation. This measure captures the volatility of a portoflio and thus gives you a sense of the extent by which a portoflio’s value may change around its mean. • Expected Shortfall Measure: While VaR has been a very popular measure of risk, it has one fundamental weakness. Recall, VaR measure the probabilty that a portfolio’s value will exceed a its VaR number in a given time-horizon. • Put Option Risk Measure: Another interesting measure of a bank’s risk is the premium paid on a put option on the bank’s value with strike price of zero. This premium masures the market’s perception of the bank’ failure likelihood and therefore is closer in spirit to concerns about failure. Our safety index risk measure is again closer in spirit to this risk measure. www.bankvega.com