January 2012

Strategic Response Quotient (SRQ): an interpretation

From: Dr John
To: Adis

In reply to your question:

The SRQ can be viewed from several perspectives and therefore has several implications, notably:

  1. SRQ measures the interest burden of the bank (Net Interest Margin as a proportion of Net Non-Interest Income).
    That is to what extent the bank is "forced" to extend loans (therefore taking increasing credit risks) to cover its Net Non-Interest Cost or a Negative Non-Interest Income.