Introduction to Finance

Jobs
Loan analyst
Loan offi
cer
Financial economist
Responsibilities
A 
loan analyst
evaluates loan applicants in terms of their cred-
itworthiness and ability to repay. Since these types of loans are 
usually for one or more years, the loan analyst must monitor and 
reevaluate outstanding loans on a periodic basis.
A 
loan offi
cer
is responsible for generating new loan business and 
managing existing loans. As such, a loan offi
cer must have the 
ability to address the needs of existing clients while at the same 
time identify and actively pursue new clients.
A 
fi nancial economist
analyzes business conditions over time and 
prepares forecasts of economic activity and employment trends. 
This information is crucial for lending institutions so that they do 
not make unwise loans.
Education
The level of education needed varies among diff erent jobs. How-
ever, all of these jobs require a solid background in economics 
and fi nance, as well as experience with computers, statistics, and 
communication.
Career Opportunities in Finance

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3.8 Bank Management
67
ings. Characteristics of preferred stock and common stock are discussed in Chapter 10. At 
the time a bank is formed, stock is purchased by the owners of the bank or by the public.
3
From time to time, additional stock may be sold to accommodate bank expansion. A bank’s 
common stock account refl ects the number of shares of stock outstanding times a “par,” or 
stated value, per share. The capital surplus account is used to record separately the diff er-
ence between the sales price of the stock and the stock’s par value. If shares of previously 
issued common stock are repurchased by a bank, an account called Treasury Stock is used 
to record the cost of the shares repurchased, and serves to reduce the pre-purchase amount 
of common equity capital.
For banks that don’t issue preferred stock, the common equity is the same as the stock-
holders’ equity.