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Cost/Income Ratio:Cost: As a standard, only non-interest costs are considered in the calculation. Non-interest costs tend to be the ones which can be controlled by the bank management.Income: Net interest income and non-interest income make up the denominator calculation.Changes in the general level of interest rates do not affect the ratio as interest costs are not included. Also, the net interest income is less prone to changes in interest rates.Cost/Asset Ratio: Operating costs to average total assets.A bank with a lot of corporate lending will have a lower cost to asset ratio than a bank with a predominantly retail lending book. Similarly, an investment bank that focuses on deal-making rather than lending will have a relatively higher ratio. So it can be said that cost to asset ratio is more of an indicator of a bank’s business mix rather than a basis for detailed cost analysis.One more interesting thing to note about the cost to asset ratio is that banks in different countries may face different cost structures. Similar structures in underlying banking systems and cultural factors also make cross-border comparisons of cost to asset ratios problematic.By contrast, cost to income ratio shows less variation and might thus be seen as a better basis for bank performance assessment.But using cost to income ratio comes with its own riders as the ratio can be manipulated and it can lead to misleading and incorrect conclusions. As with any financial statements, differences in accounting treatments have the potential to distort the ratios and so the user needs to thoroughly understand how the ratios have been arrived at before making comparisons and taking decisions.Source : Cost to Income ratios in Australasian banking - D.Tripe

There are many reasons why the Japanese stock market did not recover from the 1989 crash. If the Indian government or society can succeeded in avoiding the following problems that Japan experienced, the Indian stock market is likely to maintain sustainable growth.The stock bubbleStock prices in 1989 were extremely high. The price earnings ratio (PER) was over 60 at the peak of the market in 1989. However, the PER is now around 15. I think the PER is unlikely to recover to 60 anytime in the near future.The negative population/workforce growth in JapanAfter WWII the ratio between the working population and the non-working population increased. However, around 1990 this ratio peaked. After 1995, this ratio sharply decreased.After the start of this decline many people began to recognize that they possessed excess real estate, and mortgage prices decreased. Stock prices followed.Since 2010, the population of Japan has been in slow decline. Therefore, a full recovery of the stock market to its former high is doubtful.The stagnation of productivity in JapanAfter the Plaza Accord in 1985, the yen dropped from 240 to 140 against the dollar, and the competitive advantage of Japanese major industries such as electronics companies and automobile companies decreased. The currency further dropped to less than 100 in 1995, and export industries greatly suffered. In this century, because of the increasing competitiveness of developing countries, the global economy has flattened, and the stagnation of productivity in Japan has continued.Now the Japanese government is trying to shift the workforce into more productive sectors, such as information technologies and fin-tech. It is also encouraging women to enter or reenter the workforce. However a recovery to the stock market peak is unlikely.The following are parenthetical comments.The appreciation of the yen and the associated low inflation have been demotivating Japanese to expand businesses and to invest.In addition to these factors, a stronger yen also affects how Japanese perceive stock performance.We should more precisely assess Japanese equity performance.First, when we evaluate investors' profits, we should look at total performance, not the stock price index. In addition to price changes, dividends and share repurchases are also important determinants of profits for investors.Second, stock prices are affected by general price level changes, and the inflation rate in Japan has been lower than in other countries.The easiest way to take this effect into account is to simply observe stock price changes within the same currency. From the viewpoint of global investors, Japanese stock indices denominated in USD are important.Here is a chart containing cumulative returns on the TOPIX (Tokyo Stock Price Index).1) Price Index in JPY2) Total Performance Index in JPY (dividends and share repurchases are taken into account)3) Total Performance Index in USDYou can see that investors’ profits from TOPIX have now reached positive value in USD.

In the United States, even if you have never been involved in politics, as long as you have enough money and are talented in convincing voters to support you, then you have a chance to become a high-ranking official.While China's leadership selection mechanism and assessment methods are completely different, which can be referred as the world's most stringent.In China, if you want to be a leader, you have to start from the grassroots level to accumulate rich government work experiences after ascending nine levels of posts (section chief, deputy division chief, division chief, deputy director of general office, director of general office, vice-minister, minister, deputy-state leader, state leader). With such experiences, you may have the opportunity to become one of the candidates for leadership.Step 1: Become a member of the Communist Party of ChinaThere are 85 million CPC members in China.If you want to run for election of the leadership, first of all, you must become a CPC member. In China, the majority of new Party members are fostered in universities. And the minimum standards of becoming a Party member are: excellent academic scores, outstanding daily performance, and certain class management experience are preferred. Of course, if you are in other occupations, as long as your performance is excellent, and you are dedicated, there are opportunities to become a Party member.Step 2: Become a civil servantAfter becoming a Party member, you need to become China's public officials, that is, civil servants.Nearly two million applicants participate in the annual civil servant’s exam to compete for around 10,000 positions. Congratulations, you are now a civil servant if you stand out in fierce competition of one out of 200. But, don’t get too optimistic. You are just at the starting line, since there are over 7 million civil servants nationwide.Step 3: Start from grassroots level, get promoted step-by-step in nine post levelsWhen in the civil service, you start from the grassroots level, equivalent to community work in Europe and United States, then you climb the ladder of nine levels from county to city, then to provincial level, and then head for the central level. When you finally make your way into the Standing Committee of the Political Bureau of the CPC Central Committee, congratulations again! You now have a chance to be the next state leader of China.In the case of Chinese leader Xi Jinping, he completed nine levels after assuming 16 major positions with government work experiences in two provinces and one municipality (Fujian, Zhejiang and Shanghai) with a total population amounted to 150 million. It was a 40 + years’ journey: From a Party Secretary of a production brigade, to No. 1 leader of Fujian and Zhejiang provinces and Shanghai, and then to Vice-president of China, to CPC General Secretary, President of China, and finally top leader of China.Xi in Fujian Province in 1995Xi in Zhejiang Province in 2006Xi in Shanghai Municipality in 2007Then here comes the question: What are the criteria for getting promoted?To evaluate the candidate for a higher level, a combination of methods including ‘polls and votes’ and ‘recommendations and inspections by organization’ are used. Morality stands of fundamental importance, so the key point here is to appraise one’s ethical character and work competence.The economic growth rate is not the only benchmark to evaluate competence, the improvement of livelihoods, income index of residents, spirit of pragmatic work are all taken into consideration. Officials who crave lucrative positions or solicit votes will be removed from the list of potential candidates for promotion.What are the standards to become a Chinese leader?Let's again take the example of Xi. While working in Ningde, Fujian as local Party secretary, his footprints covered nine counties. After getting transferred to Zhejiang, he spent about 50 percent of his work time to research local people's living conditions. He usually got up at six to seven in the morning and worked late until midnight. He traveled around 90 cities and towns of the province in less than two years. While in Shanghai, he also toured all 19 districts and counties.His fast pace and vigorous efforts were rewarded with fruitful achievements. Taking Ningde as an example, during his term of one and a half years, the rate of poverty alleviation had reached a record high - 96%. While he was in Zhejiang, the GDP (gross domestic product) of the province witnessed a drastic increase from 767 billion yuan in 2002 to one trillion and 863.84 billion yuan in 2007.Facts have proven China’s rapid development, 66 million Chinese escaped from poverty; contributing more than 30% to world economic growth, which ranks No. 1 worldwide, in the past five years under Xi’s leadership can be attributed to his solid government work experience at various levels.In China, only through tests and practices at various levels can one become a state leader of the nation with a population of almost 1.4 billion.So over the years, all aspects of China's policy could maintain basic stability, economic growth has been on a steady rise, while the Chinese are enjoying better lives. The strict selection mechanism ensures excellency of the CPC, which is one of the secrets of the country's sustainable and growing economy.