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Thesis (M.A.)—University of Nebraska—Lincoln, 1967. Department of Business Organization and Management.


Copyright 1967, the author. Used by permission.


This study will examine whether selected Nebraska banks of a specific size are maximizing earning possibilities for invested reserves.Reserves are usually linked with the liquidity aspect of a bank, but there is a growing importance in their link with profitability.The purpose of this thesis is to consider a reserve position which is designed for “adequate liquidity” while presenting avenues for better investment opportunities resulting in increased profits.A reserve position designed for “adequate liquidity” provides for access to readily available funds to meet deposit withdrawals or an anticipated increase in loan demand.Once a banker has defined his reserve needs, managing the investment portfolio becomes a problem of choosing securities for reserve funds.The choice of security will depend on whether it is to meet the liquidity function or the income liquidity.

Larger banks have personnel who specialize in the management of a particular phase of banking, while in smaller banks the management of many phases is performed by one of two people.For instance, in a large bank a separate department is established to manage the investment portfolio; in a smaller bank, it is usually the collateral duty of one of the bank officers.One of the objectives of this study is to consider the possibilities for smaller banks to use more specialized techniques in asset management, especially with regard to their investment portfolio.

Advisor: Miles Tommeraasen