Finishing the euchromatic sequence of the human genome

The sequence of the human genome encodes the genetic instructions for human physiology, as well as rich information about human evolution. In 2001, the International Human Genome Sequencing Consortium reported a draft sequence of the euchromatic portion of the human genome. Since then, the international collaboration has worked to convert this draft into a genome sequence with high accuracy and nearly complete coverage. Here, we report the result of this finishing process. The current genome sequence (Build 35) contains 2.85 billion nucleotides interrupted by only 341 gaps. It covers ∼99% of the euchromatic genome and is accurate to an error rate of ∼1 event per 100,000 bases. Many of the remaining euchromatic gaps are associated with segmental duplications and will require focused work with new methods. The near-complete sequence, the first for a vertebrate, greatly improves the precision of biological analyses of the human genome including studies of gene number, birth and death. Notably, the human enome seems to encode only 20,000-25,000 protein-coding genes. The genome sequence reported here should serve as a firm foundation for biomedical research in the decades ahead

Economic profit and performance measurement in banking

Successful bank operation requires managers to weigh complex trade-offs between growth, return, and risk. In recent years banks increasingly have adopted innovative performance metrics based on the concept of economic profit, rather than accounting earnings to assist managers in making such difficult and complex decisions. Banks hope in this way to elicit better decision-making by managers and also too align managerial behavior more closely with the interests of shareholders. This article analyzes the use of economic profit for measuring the performance of banks, focusing on the allocation of equity capital to products, customers, and businesses. The author reviews the use of economic profit to evaluate performance, to price transactions, and to reward managers. He describes in detail one performance measurement and incentive system and then goes on to discuss the shortcomings of performance metrics founded on economic profit, which may distort banks' investment and operating decision-making. He concludes that banks need to recognize the ambiguities of such calculations and be prepared to create and apply multiple specialized performance measures.Bank management

Innovations in performance measurement in banking

In banking over the past 10 years, management accountants have been instrumental in the creation of new management processes and performance systems. Their innovations have enabled banks to create internal capital markets, measure risks so as to facilitate their proper hedging and pricing, and create risk-based performance standards for lines of business. They have also made great progress in creating data bases and analytical tools to resolve strategic conflicts.> This article discusses the evolution of commercial banks into semiautonomous lines of business and the managerial issues and challenges that this organizational change has created. It goes on to describe the development of funds transfer systems, the allocation of risk-based capital, and the creation of risk-adjusted hurdle rates. Unresolved issues in bank management are also reviewed, such as the problem of "adding up" in the allocation of capital, the valuation of customer relationships, and the creation of objective measures of credit risk.Banks and banking - Ratio analysis

Specialization, risk, and capital in banking

Diversification is certainly the simplest and perhaps the oldest approach to managing the trade-off between portfolio risk and return. Because diversification tends to reduce risk without a proportional reduction in returns, an overwhelming majority of commercial banks have diversified portfolios. Larger banks usually are organized into multiple specialized lines of business; smaller banks generally hold a higher proportion of marketable securities whose returns are not tied to a particular geographic market. A much smaller number of banks have chosen to ignore the benefits of diversification and focus on a particular asset such as credit cards, residential or commercial real estate, corporate trust services, or small business lending.> This article investigates specialization in banking and its effects on risk and return. The author compares a group of banks specializing in small business micro-loans (loans under $100,000) with a matched set of diversified peers. The number of specialized banks is still small, but they are expected to become more prevalent, and the number of specialized nonbanks is large, including commercial and consumer finance companies, mortgage banks, leasing companies, many thrift institutions, and some investment banks and insurance companies. The author discusses the issues that specialization creates for regulators, especially in the field of capital requirements, and the need to revise the current approach to regulatory risk-based capital to better distinguish between specialized and diversified banks.Risk ; Bank investments ; Bank capital

Failures in risk management

Risk management has received increasing attention in recent years, both from academics and from practitioners. The heightened interest is the result of a number of coincident secular trends, including increased investment in volatile emerging markets and the growing role of capital markets in both developed and emerging economies, as well as the introduction of volatile financial innovations. Risk management has also attracted attention as a result of the repeated and well-publicized failures associated with its implementation. Despite the increased attention paid to risk management, frequent instances still occur when sophisticated investors or firms experience sudden, unexpected, and devastating losses. ; This article discusses failures in risk management, why they occur, and what can be done to reduce their occurrence. The author discusses the nature of risk and the objectives of risk management. He argues that intuitively attractive conceptual simplifications often create significant errors in risk measurement. He describes such failures in risk management and goes on to discuss the implications, both for managers and for regulators.Risk management