However simplistic

For example, despite the fact that a portfolio of growth-oriented stocks, investment characteristic is that growth in market value, in its composition may include securities of other investment properties. Thus, considering also the growth and income portfolio. When choosing the structure of the securities portfolio at this stage should be a definite correlation between speculative and conservative parts of the portfolio. 7. Development of quality criteria for the securities portfolio. Established: the planned level of profitability and the profitability of the portfolio securities, the maximum level of risky investments in bank securities, the liquidity portfolio. 8. Formation of a monitoring mechanism for implementation of investment policy. 9. Overall assessment of the effectiveness of the developed investment policy. In developing the investment policy banks determine the priorities in the formation of the securities portfolio. The actual composition of the portfolio securities must comply with its investment policy. Otherwise, would not ensure the effective implementation of investment policy. Thus, the investment policy creates the necessary prerequisites for efficient operation of the general staff of the bank, reducing errors and making irrational decisions. Category: Management Operations Commercial Bank | Tags: Borrowed funds