Draft chapter for possible textbook.
Minsky, Hyman P. Ph.D., "Bank Portfolio Determination" (1959). Hyman P. Minsky Archive. 2.
A commercial bank is a business enterprise . The aim of its management is similar to the aim of the management of any other business: maximize profits while paying due attention to the various constraints within which the firm operates. In banking the firms business constraints deal with the maintenance of liquidity (the ability to pay debts when due) and solvency (the continual existence of a positive net worth). In addition to these constraints, a bank is subject to legal restrictions and controls . Hence, given the legal restrictions , a bank will maximize profits under liquidity and solvency constraints .
Willis C. Walker