Bank Profitability: The Impact of Foreign Currency Fluctuations

Given the global nature of business, and in particular banking, we should find that financial institutions are impacted by foreign currency movements. In this paper, we investigate whether the performance of 22 large U.S. commercial banks is affected by foreign exchange fluctuations over a 40-year p...

Ausführliche Beschreibung

Gespeichert in:

Bibliographische Detailangaben
Veröffentlicht in:	The journal of applied business and economics 2014-04, Vol.16 (2), p.98
Hauptverfasser:	He, Ling T, Fayman, Alex, Casey, K Michael
Format:	Artikel
Sprache:	eng
Schlagworte:	American dollar Bank earnings Bank holding companies Bank stocks Banking industry Business metrics Central banks Commercial banks Currency Foreign exchange rate risk Foreign exchange rates International finance Investigations Net income Profitability Profits Rates of return Risk exposure Studies
Online-Zugang:	Volltext
Tags:	Tag hinzufügen Keine Tags, Fügen Sie den ersten Tag hinzu!

Beschreibung
Zusammenfassung:	Given the global nature of business, and in particular banking, we should find that financial institutions are impacted by foreign currency movements. In this paper, we investigate whether the performance of 22 large U.S. commercial banks is affected by foreign exchange fluctuations over a 40-year period. We find that these large U.S. banks are exposed to foreign exchange risk and that specific bank performance is related to the value of the dollar relative to market baskets of other currencies. These results can potentially be used to mitigate some of this risk and/or alter investment portfolios given various foreign currency movements.
ISSN:	1499-691X