REWARD – RISK TRADE OFF IN LEVERAGING BANKING TECHNOLOGY - V.K.Sharma, Former Executive Director

The Keynote Address delivered by Mr. V. K. Sharma, Advisor, Edelweiss Financial Services Ltd  and former Executive Director, Reserve Bank of India, at the Banking Technology Summit 2013, organized by Ernst & Young,  at Mumbai

........Having seen the imperative and inevitability of this seminally critical role of leveraging technology in banking, it would only be instructive and value-adding to consider the business model of a typical safe, and sound, bank. A bank is typically characterized by relatively high financial leverage, which, in turn, is measured by what is known as Equity Multiplier (EM), which, in turn, is nothing but total assets of a bank divided by its common equity/ shareholder funds. Multiplying this leverage (EM) by what is called Return on Assets (ROA) gives Return on Equity (ROE) for a bank.........

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