banking essay
Bank Organisation, Resource and Information
1. Introduction In modern society, banks, especially large international banks, are playing a more and more important role in people’s daily life, as an individual, banks provide interest that attract you to put money in, and also, when you want to set up a new business, banks are there to offer a help. However, the financial crisis warns that banks are not all about good, they can also be dangerous, the recognition that banks only act as financial intermediaries is long gone, instead, they generate more complex functions, thus new bank business models should also be taken into consideration. Through this paper, the structure of the banks and related information production, capital allocation studied by Stein (2002) will be firstly talked about, then, two researches conducted by Holland (2014) and Chen et al (2014) looking at bank models and intangibles will be critically discussed. At the last part, some limitations and further considerations will be given.
2. Stein (2002) Through Stein (2002)’s work, he mainly dealt with different performances generated by two different bank organizations—decentralization and hierarchy. The content focused on information production and capital allocation within the organization. Based on previous research and empirical evidence, he proposed a model to explain and clarify that bank organizations or structures are really important for different kind of information and thus generating different performances. Most of the data and points mentioned here are from Stein (2002), otherwise they will be cited clearly.
2.1 Information Production First of all, it is vital to have a brief understanding of the two different kinds of information, which are soft and hard. Soft information refers to information that can not be precisely measured except the agent which is kind of subjective; however, hard information is just the opposite with
1. Introduction In modern society, banks, especially large international banks, are playing a more and more important role in people’s daily life, as an individual, banks provide interest that attract you to put money in, and also, when you want to set up a new business, banks are there to offer a help. However, the financial crisis warns that banks are not all about good, they can also be dangerous, the recognition that banks only act as financial intermediaries is long gone, instead, they generate more complex functions, thus new bank business models should also be taken into consideration. Through this paper, the structure of the banks and related information production, capital allocation studied by Stein (2002) will be firstly talked about, then, two researches conducted by Holland (2014) and Chen et al (2014) looking at bank models and intangibles will be critically discussed. At the last part, some limitations and further considerations will be given.
2. Stein (2002) Through Stein (2002)’s work, he mainly dealt with different performances generated by two different bank organizations—decentralization and hierarchy. The content focused on information production and capital allocation within the organization. Based on previous research and empirical evidence, he proposed a model to explain and clarify that bank organizations or structures are really important for different kind of information and thus generating different performances. Most of the data and points mentioned here are from Stein (2002), otherwise they will be cited clearly.
2.1 Information Production First of all, it is vital to have a brief understanding of the two different kinds of information, which are soft and hard. Soft information refers to information that can not be precisely measured except the agent which is kind of subjective; however, hard information is just the opposite with
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