Do you think that removing the impediments to a nationwide banking system will be beneficial to the economy? Explain.

Q: What is shadow banking? What are the backstops in shadow banking and traditional banking? Please…

A: Shadow banking is unregulated where the lenders, creditors, brokers, and other financial…

Q: Commercial banks play an important role in the financial system and the economy. As a key component…

A: Commercial banks : In simple words, A commercial bank can be understood as the financial institution…

Q: What are the main sources of funding for commercial banks?

A: Banks are a financial institution that receives money from customers and makes a loan to the…

Q: Describe the Federal Reserve Banking System. Which is the most vital? Which is less important? Why?

A: This question explains about the Federal Reserve Banking System is a system of banks run by the…

Q: Discuss the Basel disintermediated bank scenario and its impact on incumbent banks’ present business…

A: Basel disintermediated bank scenario: In this scenario, banks are not significant players. They are…

Q: In your opinion, do we still need a regulator if the banks are collapsing anyway?

A: Federal and state governments have various organizations set up that control and administer…

Q: Why do community banks not want Wal-Mart to be in the banking business? What are the possible…

A: The world's largest retailer, Walmart is an American multinational  company. It  operates a chain of…

Q: Which of the following is not a reason for banks to be regulated? a.To protect depositors. b.To…

A: A bank is a type of financial institution that handles all procedures linked to depositing and…

Q: eign exchange risks and operational risks faced by banks operating in the financial sector, and…

A: Foreign Exchange Exposure refers to the risk associated with ever-changing foreign exchange rates…

Q: Why do managers of financial institutions care so much about the activities of the Central Bank?

A: The central bank has lots of powers to alter the incentives that are given to companies i.e.…

Q: Examine the processes for the acquisition of licence by Banks and other financial institutions in…

A: Answer: The legislation which regulated the acquisition process of license by a bank is Banking Act,…

Q: hy banking regulation has been so important over the years?

A: Step1 The function of the  Bank in the country has become extremely relevant as cross-border…

Q: Discuss the how government can safeguard against financial instability

A: Financial instability could be a condition when problems within markets, institutions, or the…

Q: Securitization changes the systemic (system-wide) risksin the regulated and unregulated “shadow”…

A: Securities refer to the financial instruments holding monetary value representing ownership in a…

Q: open

A: Open market operations refer to the act of purchasing or selling the securities of the government by…

Q: do you think that the collaboration between Central Banks and Government creates challenges for…

A: If a country's economy were a human body, the central bank would be its heart. And, just as the…

Q: what are the advantages and drawbacks for digital Technology: How It Could Transform the…

A: Digital technology is referred as an usage of an advanced communication as well as information…

Q: In your opinion, what is the effect of the banking sector clean up on investment decisions of…

A: Investment decisions are used to decide on the profitability of a project. So, it's important for…

Q: hat is the importance of regular bank reconciliations?

A: The bank reconciliation statement is prepared to equate the balances of cash book and pass book with…

Q: Discuss the potential market failure in the diamond model of banking regulations

A: The diamond model in banking is also known as the dual principle-agent relationship model because it…

Q: ring and explain its advantages and disadvantages. Why might a bank be interested in a company’s…

A: Gearing : In simple words, gearing refers to the ratio of the company debt to equity. It depicts how…

Q: Why has the trend in bank supervision moved awayfrom a focus on capital requirements to a focus on…

A: Bank supervision is generally conducted in order to ensure that the banking operations are conducted…

Q: Are merchant banks relevant to the Ugandan economy?

A: Meaning of Merchant Bank :- A merchant bank can be classified as the type of financial intermediary…

Q: Discuss with examples why the money markets could be considered arguable as playing complementary…

A: The complementary role of Money Markets with banks is discussed as follows: The money market is a…

Q: Why will bank never opt for the rejection of payment of LC to exporters bank?

A: A Letter of Credit or Credit Letter refers to a assurance letter given by the bank to its buyer that…

Q: What’s the difference between a commercial bank and an investment bank?

A: A financial institution that provides services such as accepting the deposits and providing the loan…

Q: Which do you prefer? the traditional way of transacting with banks and other financial institutions…

A: Online or e banking is where the users make all the financial transactions via internet. they offer…

Q: In recent years, ‘direct lenders’ and ‘shadow banks’ have increasingly provided funding for…

A: The lending agencies are the financial institutions that provide funds to the public, business…

Q: why the non-government financial institutions are allowed to operate in our economy.

A: A non- government financial institution are those that does not have full banking license or is not…

Q: Briefly discuss the cause and the solution(s) to the international bank crisis involving…

A: The origin of the international bank crisis affecting LDC’s is attributed to the largest…

Q: Why would the U.S. government consider reinstitutingthe “wall” between investment banking and…

A: A commercial bank is a financial institution which provides various financial services like…

Q: shadow banking and how does it differ from traditional retail banking? What kind  of threat does…

A: Shadow Banking: Shadow banking refers to bank-like activities that occur outside of the formal or…

Q: How could the Bank of Valletta cause a systemic risk in Malta ?

A: Various risks are associated with different businesses. management can control this risk up to a…

Q: What are some arguments in favor of continuing government support of Citigroup? Discuss who would be…

A: Citigroup is an American-based investment banking company founded in 1998 by the merger of Citicorp…

Q: What is evergreening in banking and why it may arise as an equilibrium choice of banks. Carefully…

A: Answer:-  Evergreening:- Evergreening technically refers to the practice of "managing" the balance…

Q: How do adverse selection and moral hazard affect the bank lending function? And How can minimise…

A: A Moral hazard occurs when one party tends to behave in the riskiest manner if it is protected…

Q: Why is the bank important to our society?

A: The bank is highly important to our society. It should be noted that banks, on an overall basis, are…

Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.