Hey, What’s That Opaque Financial Institution Worth?
- Topics:
- Decision Analysis
- Tags:
- Bank,
- Finance,
- Investment,
- Valuation
- Source:
- Knowledge@Wharton
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Overview: To address capital allocation and performance measurement issues specific to the banking industry, a conference called “Measuring and Managing the Value of Financial Institutions: Integrating External and Internal Valuations” was conducted. The conference didn’t solve the valuation riddle, but it explored how companies think about shareholder value and capital allocation. Figuring out what a bank is worth is difficult. The reasons vary. Chief among them are that banks are credit-sensitive, they are opaque institutions, they hold illiquid instruments and they are vulnerable to sudden regime shifts. A valuation gap typically exists between what a bank’s valuation methodology says it’s worth and the value placed on it by the market. To get the details of how financial institutes go through it read the article.
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Format: HTML | Date: Jun 2003 | Pages: 1
