Government administers the trading post: The underlying philosophy of the law of markets ….


Government’s role is to administer the trading post by managing the masses with a law-and-order scheme; broadcasting the value of its money through a regulated banking system; and expanding into and protecting new markets with its military and diplomatic corps.  Government, specifically western government, operationalizes the tenets of western philosophy: that man is at war with himself and nature and to alleviate the uncertainty of extermination, man must divide up the world and seek the most yield from the resulting parts.

Humans have no other reason to engage each other but to extract value from one another.  To garner the most yield from this engagement, the exchange, the trade, needs to be unencumbered by conflict.  Where it is impossible to obtain the means for survival by staying in one’s lane and exchange is necessary, humans then put in place customs, practices, rules designed to reduce conflict. 

Government promulgates the statutes, codes, and policies that manage the day-to-day mitigation of conflict.  It stays “in the money” by optimally maintaining the physical and social infrastructure that facilitates and expands its tax base.  It’s ability to effectively manage infrastructure and expand its tax base makes its money more attractive to traders.

Unfortunately, government has taken on a life of its own, going beyond its mandate to manage infrastructure and ensure law and order to regulating society on an increasingly micro level.  More of its policy and legislative initiatives appear intended to replace private market judgment with its own government judgment.  This imposition of government judgment on market judgment was not part of the original deal between traders, market makers, and government.  The imposition has seeped into the act of establishing price, an act that is best left to markets. 

Government now wants more than its cut in the form of taxes.  It now wants to weaponize price discovery and price setting for the purpose of expanding its cut by garnering more votes from the electorate.

The merchant trader, to protect her lane, should inform herself daily on the political process and support efforts that push back on government efforts to intervene in her ability to set price and other terms and conditions within and via the markets.

Alton Drew


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Disclaimer: The above is provided for informational purposes and should not be construed as financial or legal advice or as creating an agreement to provide financial or legal advice.

IMF Releases the 2020 Financial Access Survey Results

Source: International Monetary Fund

November 9, 2020

Washington, DC: On November 9, 2020, the International Monetary Fund (IMF) released the results of the eleventh annual Financial Access Survey (FAS)[1] The FAS provides a unique supply-side database on access to and use of financial services covering 189 jurisdictions, with more than 100 series and historical data from 2004. The FAS data allow policymakers to measure and track the progress made in financial access and benchmark it against that of peers.

The 2020 round offers a pre-pandemic snapshot of the levels of financial access

The current round of the FAS provides a pre-pandemic snapshot of the levels of financial access to both traditional and digital financial services. Overall, access to and usage of financial services, as measured by the FAS indicators has deepened over time in low- and middle-income economies. While the number of ATMs per 100,000 adults has grown for the past few years, the number of commercial bank branches has remained relatively stable at the 2013 level. These trends likely reflect the recent rise of non-branch retail agent outlets and digital financial services—such as mobile money and mobile and internet banking—which continue to play a significant role in advancing financial access especially in low- and middle-income countries. Notwithstanding this progress, challenges of access remain. Notably, women and small and medium-sized enterprises (SME) have often been excluded from the financial system. Data from the FAS suggest that progress made in closing the financial access gender gap varies across countries with microfinance institutions playing an important role in satisfying the unmet demands of financial services for women in some economies. Lending to SMEs continues to be constrained.

Financial Access COVID-19 Policy Tracker was launched to complement FAS data collection

To supplement country authorities’ efforts to support financial access during the pandemic, the IMF developed a Financial Access COVID-19 Policy Tracker, which documents policy measures implemented to facilitate financing for SMEs and the use of digital financial services across the world. The Policy Tracker aims at facilitating information exchange and peer learning among country authorities about the measures related to SME finance and greater use of digital financial services in the current pandemic context.

Countries responded with measures to support SME financing during the COVID-19 pandemic

Social distancing measures in place during the COVID-19 pandemic are expected to significantly impact SMEs, which account for 90 percent of businesses and 50 percent of employment worldwide. In response, country authorities have put in place measures to help SMEs weather the current pandemic. The measures documented by the Policy Tracker have been classified into five categories: (i) debt moratoriums, (ii) loan guarantees, (iii) lower interest rates, (iv) tax relief, and (v) financial assistance.

Key policy responses to aid SME finance during the COVID-19 pandemic    
Key policy responses to aid SME finance during the COVID-19 pandemic

Source: Financial Access COVID-19 Policy Tracker, IMF. Note: The list of countries in the figure above is only a subset of those included in the tracker. Country examples are for illustration purposes only.

Digital financial services provide opportunities in the pandemic context but also pose risks

Digital financial services, both mobile money and mobile and internet banking, have two key features—high market penetration and minimal physical contact to transact—that support undisrupted financial transactions during the current pandemic. In addition, country authorities across the globe have enacted emergency measures to encourage the use of digital financial services. These measures, also documented in the Policy Tracker, can be classified into four broad categories: (i) person-to-person (P2P) transaction fee cuts; (ii) increased balance and transaction limits; (iii) easing of know your customer (KYC) requirements; and (iv) simplified transaction processes. Bazarbash et al. (2020) discuss the COVID-19 response measures related to mobile money and its associated risks in a recent IMF Special Series Note on COVID-19. The next round of FAS data collection—scheduled to start in March 2021—may help provide useful insights on the impact of the COVID-19 pandemic on financial access and use.

[1] The 2020 FAS was made possible with the generous support of the IMF’s Data for Decisions (D4D) Fund. The latest FAS data with country-specific metadata are available at and the 2020 FAS Trends and Development can be downloaded here.

IMF Communications Department


PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG


Cayman Islands, United Kingdom, and Japan lead as source of foreign securities held by the United States

Source: U.S. Department of the Treasury

Washington – The findings from the annual survey of U.S. portfolio holdings of foreign securities at year-end 2019 were released today and posted on the Treasury web site at

The survey was undertaken jointly by the U.S. Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System. 

A complementary survey measuring foreign holdings of U.S. securities is also conducted annually.  Data from the most recent such survey, which reports on securities held at end-June 2020, are currently being processed.  Preliminary results are expected to be reported on February 26, 2021.


This survey measured the value of U.S. portfolio holdings of foreign securities at year-end 2019 as approximately $13.1 trillion, with $9.5  trillion held in foreign equity, $3.1 trillion held in foreign long-term debt securities (original term-to-maturity in excess of one year), and $0.5 trillion held in foreign short-term debt securities.  The previous such survey, conducted as of year-end 2018, measured U.S. holdings of approximately $11.3 trillion, with $7.9 trillion held in foreign equity, $2.9 trillion held in foreign long-term debt securities, and $0.5 trillion held in foreign short-term debt securities.  The increase in 2019 was mainly in equity (see Table 1).

U.S. portfolio holdings of foreign securities by country at the end of 2019 were the largest for the Cayman Islands ($2.00 trillion), followed by the United Kingdom ($1.52 trillion), Japan ($1.15 trillion), and Canada ($1.10 trillion) (see Table 2).  These four countries attracted 44 percent of total U.S. portfolio investment, versus 45 percent the previous year.
The surveys are part of an internationally coordinated effort under the auspices of the International Monetary Fund (IMF) to improve the measurement of portfolio asset holdings.


(Billions of dollars)

Type of SecurityDecember 31, 2018December 31, 2019
Long-term Securities10,79312,617
            Long-term debt2,8943,139
Short-term debt securities502470


Table 2.  Market value of U.S. portfolio holdings of foreign securities, by country and type of security, for countries attracting the most U.S. investment, as of December 31, 2019 [1]

(Billions of dollars)

Country or categoryTotalEquityDebt
Cayman Islands2,000,8011,501,486499,315494,4794,836
United Kingdom1,517,1651,013,549503,616411,51092,106
Korea, South231,202211,61519,58819,354234
China, mainland (1)222,282204,25218,03015,1972,833
Hong Kong180,713170,8349,8797,2192,660
Rest of world2,015,2931,208,546806,748740,46666,282

*     Greater than zero but less than $500 million.

Items may not sum to totals due to rounding.

[1] The stock of foreign securities for December 31, 2019, reported in this survey may not, for a number of reasons, correspond to the stock of foreign securities on December 31, 2018, plus cumulative flows reported in Treasury’s transactions reporting system.  An analysis of the relationship between the stock and flow data is available in Exhibit 4 and the associated text of “U.S. Portfolio Holdings of Foreign Securities as of End-December 2019.”

[2] China, Hong Kong, and Macau are all reported separately.

Century Bancorp announces its earnings …

Source: Century Bancorp.

MEDFORD, Mass.–(BUSINESS WIRE)–Century Bancorp, Inc. (NASDAQ:CNBKA) ( (“the Company”) today announced net income of $30,609,000 for the nine months ended September 30, 2020, or $5.50 per Class A share diluted, an increase of 5.7% compared to net income of $28,967,000, or $5.20 per Class A share diluted, for the same period a year ago. Total assets increased 14.6% from $5.49 billion at December 31, 2019 to $6.3 billion at September 30, 2020. For the quarter ended September 30, 2020, net income totaled $10,887,000 or $1.96 per Class A share diluted, an increase of 8.0% compared to net income of $10,084,000, or $1.81 per Class A share diluted, for the same period a year ago.

“Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations”Tweet this

The Company’s Board of Directors voted to increase its regular quarterly dividend from 14.00 cents ($0.14) per share to 16.00 cents ($0.16) per share on the Company’s Class A common stock, and from 7.00 cents ($0.07) per share to 8.00 cents ($0.08) per share on the Company’s Class B common stock. The dividends were declared payable November 16, 2020 to stockholders of record on November 2, 2020.

Net interest income totaled $78.4 million for the nine months ended September 30, 2020 compared to $70.5 million for the same period in 2019. The 11.2% increase in net interest income for the period is primarily due to a decrease in interest expense as a result of falling interest rates. Prepayment penalties collected amounted to approximately $946,000 for the first nine months of 2020 compared to $18,000 for the same period last year. The net interest margin decreased from 2.08% on a fully tax-equivalent basis for the first nine months of 2019 to 2.01% for the same period in 2020. This was primarily the result of increased margin pressure during the recent decrease in interest rates across the yield curve. The average balances of earning assets increased for the first nine months of 2020 compared to the same period last year, by $609.0 million or 12.3%, combined with an average yield decrease of 0.55%, resulting in a decrease in interest income of $6.2 million. The average balance of interest-bearing liabilities increased for the first nine months of 2020 compared to the same period last year, by $486.9 million or 12.1%, combined with an average interest-bearing liabilities interest cost decrease of 0.59%, resulting in a decrease in interest expense of $14.1 million.

The provision for loan losses increased by $2,975,000 from $700,000 for the nine months ended September 30, 2019 to $3,675,000 for the same period in 2020, primarily as a result of the economic uncertainties associated with the novel coronavirus disease (COVID–19) pandemic and increased loan balances.

The Company’s effective tax rate increased from 2.0% for the nine months ended September 30, 2019 to 9.5% for the same period in 2020. This was primarily as a result of an increase in taxable income relative to total income and a reduction in tax accruals, during 2019, related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. On March 27, 2020, the Coronavirus, Aid, Relief and Economic Security (CARES) Act was signed into law. As a result of the CARES Act, the full balance of the AMT credit was refunded in 2020.

At September 30, 2020, total equity was $363.4 million compared to $332.6 million at December 31, 2019. The Company’s equity increased primarily as a result of earnings, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 6.79% at September 30, 2020, compared to 7.25% at December 31, 2019. The decrease in the leverage ratio was due to an increase in quarterly average assets, offset somewhat by an increase in stockholders’ equity. Book value as of September 30, 2020 was $65.27 per share compared to $59.73 at December 31, 2019.

The Company’s allowance for loan losses was $33.4 million or 1.12% of loans outstanding at September 30, 2020 compared to $29.6 million or 1.22% of loans outstanding at December 31, 2019, and $29.1 million or 1.22% of loans outstanding at September 30, 2019. The ratio of the allowance for loan losses to loans outstanding has decreased from December 31, 2019, primarily from approximately $232 million of Payroll Protection Program (PPP) loans that are guaranteed by the U.S. Small Business Administration (SBA), which require no allowance for loan losses. Nonperforming assets totaled $1.4 million at September 30, 2020, compared to $2.0 million at December 31, 2019, and $1.1 million at September 30, 2019.

As of September 30, 2020, the Company has COVID-19 modifications of 33 loans aggregating $37,987,000, primarily consisting of short-term payment deferrals. Of these modifications, $37,987,000, or 100%, were performing in accordance with their modified terms.

The CARES Act also allows companies to delay Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), including the current expected credit losses methodology for estimating allowances for credit losses. The Company has elected to delay FASB ASU 2016-13. This ASU will be delayed until the earlier of the date on which the national emergency concerning the COVID–19 outbreak declared by the President on March 15, 2020 terminates or December 31, 2020, with an effective retrospective implementation date of January 1, 2020.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-seven full-service branches in the Greater Boston area, offers a full range of Business, Personal and Institutional Services.

Century Bank and Trust Company is a member of the FDIC and is an Equal Housing Lender.

This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Condition (unaudited)
(in thousands)
September 30,December 31,
Cash and Due From Banks$101,679$44,420
Federal Funds Sold and Interest-bearing Deposits In Other Banks 310,901 214,273
Securities Available-for-Sale (AFS) 293,277 262,190
Securities Held-to-Maturity 2,407,176 2,351,120
Federal Home Loan Bank of Boston stock, at cost 13,361 19,471
Commercial & Industrial 1,315,407 812,417
Municipal 130,047 120,455
Construction & Land Development 9,116 8,992
Commercial Real Estate 784,895 786,102
Residential Real Estate 443,703 371,897
Consumer and Other 19,866 21,893
Home Equity 287,099 304,363
Total Loans 2,990,133 2,426,119
Less: Allowance for Loan Losses 33,394 29,585
Net Loans 2,956,739 2,396,534
Bank Premises and Equipment, net 37,340 33,952
Accrued Interest Receivable 13,223 13,110
Goodwill 2,714 2,714
Other Assets 159,016 154,640
Total Assets$6,295,426$5,492,424
Demand Deposits$991,590$712,842
Interest Bearing Deposits:
Savings and NOW Deposits 1,932,339 1,678,250
Money Market Accounts 1,906,676 1,453,572
Time Deposits 581,866 555,447
Total Interest Bearing Deposits 4,420,881 3,687,269
Total Deposits 5,412,471 4,400,111
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 231,030 266,045
Other Borrowed Funds 152,248 370,955
Total Borrowed Funds 383,278 637,000
Other Liabilities 100,160 86,649
Subordinated Debentures 36,083 36,083
Total Liabilities 5,931,992 5,159,843
Total Stockholders’ Equity 363,434 332,581
Total Liabilities & Stockholders’ Equity$6,295,426$5,492,424
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and nine months ended September 30, 2020 and 2019
(in thousands)
Quarter ended September 30,Nine months ended September 30,
Interest Income:
Securities Held-to-Maturity 14,186 14,623 44,701 43,006
Securities Available-for-Sale 818 2,184 3,493 7,305
Federal Funds Sold and Interest-bearing Deposits In Other Banks 69 928 747 3,204
Total Interest Income 36,504 39,852 112,419 118,621
Interest Expense:
Savings and NOW Deposits 1,726 5,445 7,569 16,788
Money Market Accounts 3,056 5,050 12,090 15,805
Time Deposits 2,858 3,038 9,141 8,724
Securities Sold Under Agreements to Repurchase 241 697 1,176 1,572
Other Borrowed Funds and Subordinated Debentures 1,292 1,852 4,093 5,274
Total Interest Expense 9,173 16,082 34,069 48,163
Net Interest Income 27,331 23,770 78,350 70,458
Provision For Loan Losses 900 75 3,675 700
Net Interest Income After
Provision for Loan Losses 26,431 23,695 74,675 69,758
Other Operating Income:
Service Charges on Deposit Accounts 2,239 2,310 6,558 6,801
Lockbox Fees 996 937 2,850 3,018
Net Gain on Sales of Loans    154
Other Income 934 1,039 3,112 3,737
Total Other Operating Income 4,169 4,286 12,520 13,710
Operating Expenses:
Salaries and Employee Benefits 11,362 10,670 33,020 32,621
Occupancy 1,477 1,463 4,448 4,686
Equipment 809 862 2,608 2,440
Other 4,519 4,467 13,306 14,170
Total Operating Expenses 18,167 17,462 53,382 53,917
Income Before Income Taxes 12,433 10,519 33,813 29,551
Income Tax Expense 1,546 435 3,204 584
Net Income$10,887$10,084$30,609$28,967
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
September 30,September 30,
Cash and Due From Banks$80,686 $74,413 
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 238,525  184,035 
Securities Available-For-Sale (AFS) 293,301  325,036 
Securities Held-to-Maturity (HTM) 2,346,502  2,128,082 
Total Loans 2,693,000  2,325,136 
Less: Allowance for Loan Losses 31,359  28,936 
Net Loans 2,661,641  2,296,200 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (2,861) (3,352)
Bank Premises and Equipment 36,253  26,273 
Accrued Interest Receivable 12,630  13,942 
Goodwill 2,714  2,714 
Other Assets 164,804  133,754 
Total Assets$5,834,195 $5,181,097 
Demand Deposits$889,237 $764,852 
Interest Bearing Deposits:
Savings and NOW Deposits 1,881,897  1,818,017 
Money Market Accounts 1,603,367  1,249,531 
Time Deposits 597,589  512,228 
Total Interest Bearing Deposits 4,082,853  3,579,776 
Total Deposits 4,972,090  4,344,628 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 220,796  205,185 
Other Borrowed Funds 169,972  201,804 
Total Borrowed Funds 390,768  406,989 
Other Liabilities 88,028  79,327 
Subordinated Debentures 36,083  36,083 
Total Liabilities 5,486,969  4,867,027 
Total Stockholders’ Equity 347,226  314,070 
Total Liabilities & Stockholders’ Equity$5,834,195 $5,181,097 
Total Average Earning Assets – QTD$5,881,860 $4,971,831 
Total Average Earning Assets – YTD$5,571,328 $4,962,289 
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)September 30,September 30,
Performance Measures:
Earnings per average Class A share, diluted, quarter$1.96 $1.81 
Earnings per average Class A share, diluted, year-to-date$5.50 $5.20 
Return on average assets, year-to-date 0.70% 0.75%
Return on average stockholders’ equity, year-to-date 11.78% 12.33%
Net interest margin (taxable equivalent), quarter 1.96% 2.08%
Net interest margin (taxable equivalent), year-to-date 2.01% 2.08%
Efficiency ratio, Non-GAAP (1) 55.4% 59.1%
Book value per share$65.27 $59.08 
Tangible book value per share – Non-GAAP (1)$64.79 $58.59 
Capital / assets 5.77% 6.21%
Tangible capital / tangible assets – Non-GAAP (1) 5.73% 6.16%
Common Share Data:
Average Class A shares outstanding, diluted, quarter and year-to-date 5,567,909  5,567,909 
Shares outstanding Class A 3,655,469  3,650,449 
Shares outstanding Class B 1,912,440  1,917,460 
Total shares outstanding at period end 5,567,909  5,567,909 
Asset Quality and Other Data:
Allowance for loan losses / loans 1.12% 1.22%
Nonaccrual loans$1,419 $1,066 
Nonperforming assets$1,419 $1,066 
Loans 90 days past due and still accruing$49 $ 
Accruing troubled debt restructures$2,240 $2,404 
Net charge-offs (recoveries), year-to-date$(134)$146 
Leverage ratio 6.79% 7.25%
Common equity tier 1 risk weighted capital ratio 11.36% 11.90%
Tier 1 risk weighted capital ratio 12.40% 13.12%
Total risk weighted capital ratio 13.39% 14.13%
Total risk weighted assets$3,370,541 $2,867,422 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
Calculation of Efficiency ratio:
Total operating expenses(numerator)$53,382 $53,917 
Less: other real estate owned expenses   (139)
Total adjusted operating expenses(numerator)$53,382 $53,778 
Net interest income$78,350 $70,458 
Total other operating income 12,520  13,710 
Tax equivalent adjustment 5,558  6,875 
Total income(denominator)$96,428 $91,043 
Efficiency ratio – Non-GAAP 55.4% 59.1%
Calculation of tangible book value per share:
Total stockholders’ equity$363,434 $328,960 
Less: goodwill 2,714  2,714 
Tangible stockholders’ equity(numerator)$360,720 $326,246 
Total shares outstanding at period end(denominator) 5,567,909  5,567,909 
Tangible book value per share – Non-GAAP$64.79 $58.59 
Book value per share – GAAP$65.27 $59.08 
Calculation of tangible capital / tangible assets:
Total stockholders’ equity$363,434 $328,960 
Less: goodwill 2,714  2,714 
Tangible stockholders’ equity(numerator)$360,720 $326,246 
Total assets$6,295,426 $5,299,181 
Less: goodwill 2,714  2,714 
Tangible assets(denominator)$6,292,712 $5,296,467 
Tangible capital / tangible assets – Non-GAAP 5.73% 6.16%
Capital / assets – GAAP 5.77% 6.21%


William P. Hornby, CPA
Phone: 781-393-4630
Fax: 781-393-4071