1. Banks primarily earn income from fees and interest on loans.
2. Net Interest Margin (NIM) is the difference between the interest earned on loans and the interest paid on deposits.
3. A declining Net Interest Margin (NIM) indicates that the bank's profitability is improving.
4. High leverage makes a bank more stable and less vulnerable to market fluctuations.
5. Diversification of assets reduces a bank's exposure to sector-specific downturns.
6. Wells Fargo's revenue decreased from 2020 to 2023.
7. The increase in the cost of revenue at Wells Fargo in 2023 could be a potential risk factor.
8. Maintaining adequate liquidity is not important for banks since they can always borrow more funds.
9. The Capital Adequacy Ratio (CAR) helps ensure that a bank has enough capital to cover potential losses.
10. Stress testing and scenario analysis are only necessary during economic downturns.