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Strategic Response Quotient (SRQ): an interpretation

john wrote on January 27, 2012 - 10:56pm
in

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.
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