A Bank Ratio Comparison (For my students)

We talked a significant amount lately about bank performance ratios and the various sources for this data. I grabbed bank efficiency ratio data from the FDIC Statistics on Depository Institutions for 2016 Q2 and plotted it against the return on equity (ROE). I did remove any banks with efficiency ratios above one hundred because there were some significant outliers. Students will recall this is not my favorite ratio because it is a bit too arbitrary and I think the graph bears this out.

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