Notes and Communications APPLICATIONS OF MANAGEMENT SCIENCE IN BANKING

Abstract

This paper identifies and classifies 164 journal articles on management science in banking according to technique and application area. An analysis provides some interesting insights into historical trends and future prospects for research. Subject Areax Eanking and Finance and Operational Sciences.

Citibank Models Credit Risk on Hybrid Mortgage Loans in Taiwan

“…New credit instruments can have unique characteristics that affect the ways that loans' risk profiles change over their lives. All these circumstances reinforce Zanakis et al's (1986) claim that financial institutions constantly need new analytical tools in their competitive business environments. In this case, Citibank had introduced a new mortgage product (a hybrid consisting of a traditional amortizing mortgage loan coupled with a personal line of credit tied to the same collateral) in a changing foreign business environment.…”

Modeling exposure to losses on automobile leases

“…They did not apply the multivariate models in a forecasting or credit-risk management context, even for estimating default rates alone. Zanakis et al (1986) noted the relationship of profitability to the provision for loan loss reserves, and asserted the need for new analytical tools for this purpose in an increasingly competitive business environment.…”

An inventory model for optimal cash management for financial institutions : a case study

“…Much of the literature on the subject of cash management is devoted to quantitative methods of controlling and managing cash reserves (Zanakis et al, listed 164 publications of OR/MIS applications in banking [11]). In an earlier study, Baumol applied cash holdings by firms to the classical ' Mot size" model of inventory management [2].…”