# Size of a bank

- Canonical URL: https://www.gerhardmerk.de/size-of-a-bank
- Post ID: 592949
- Modified: 2023-07-25T21:13:11+00:00
- Language: en

## Definition

There is some dispute as to which characteristics should be used to measure the size of a bank. - The most important size indicator in the literature is usually the total amount of loans granted. However, it may be that an institution has transferred a good portion of its loans to special purpose entities through securitization, which then no longer appear on the bank's balance sheet. - With regard to liquidity, it is also important to bear in mind that the sale of asset-backed securities can suddenly improve the liquidity ratio. - With regard to the regulatory capital ratio, this ratio is reduced if the institution has completely transferred the risks it has assumed to the market. - Whether and to what extent earnings, headcount, branch network and other (measurable!) factors should be used in determining bank size is probably difficult to decide satisfactorily in general. - See alliances, cross-border, off-balance sheet, bank size, optimal, bank mergers, bank-bust-because-small thesis, assertion strategy, decentralization principle, Gibrat rule, gigabank, size effects, consolidation, correspondent bank relationship, megamania, megamergers, multi-boutique approach, Octopus, Penrose theorem, fact formation, Sifi oligopoly, subsidiarity principle. - Cf. ECB Monthly Bulletin, February 2008, p. 101 (impact of securitization on traditional size indicators). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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