First national corporate image and tradition

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Part A: First National Corporation Analysis

1. Does asset-based lending fit First National's corporate image and tradition? Its lending philosophy? Explain.

2. Does asset-based lending improve the bank's return on net worth (RONW) and return on assets (ROA)?

3. Does First National's deposit composition make it necessary to fmd higher-yielding earning assets than are current booked? Explain.

4. Does First National venture in asset-based lending parallel banks lending practices prior to the recent global financial crisis? Justify your position.

Part B: The Financial Services Modernization Act of 1999

The Financial Services Modernization Act of 1999 repealed portion of the Glass-Steagall Act of 1933, and permitted the creation of "financial services holding companies" that could engage in activities associated with commercial banking, insurance and securities. One consequence of the regulatory change was to decompose the lending function from "origination and hold" to "origination and distribution". Discuss the impact of this regulatory change on the risk measurement and management function and its role in the global financial crisis.

Reference no: EM13746537

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