If you were the Federal Reserve and wanted the publicto be accessible to more funds, would you increase ordecrease discount rate to banks? Why?
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If you were the Federal Reserve and wanted the public
to be accessible to more funds, would you increase or
decrease discount rate to banks? Why?
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- In 2008, as a financial crisis began to unfold in theUnited States, the FDIC raised the limit on insuredlosses to bank depositors from $100,000 per account to$250,000 per account. How would this help stabilizethe financial system?Why was the Federal Reserve System set up withtwelve regional Federal Reserve banks rather than onecentral bank, as done in other countries?Describe shadow banking and FinTech and give one example of FinTech. Is it fair to state that FinTEch is aform of shadow banking. If so or if not, please explain why
- In what way might consumer protection regulationsnegatively affect a financial intermediary’s profits?Can you think of a positive effect of such regulationson profits?Suppose that after a few mergers and acquisitions, onlyone bank holds 70% of all deposits in the United States.Would you say that this bank would be considered toobig to fail? What does this tell you about the ongoingprocess of financial consolidation and the governmentsafety net?What were the two previous central banks the United States had before the current Federal Reserve system? When was the Federal Reserve established? How old are some other central banks in other countries? Describe in detail how the Federal Reserve is structured and explain how it is mostly independent from political interference? Using ideas like supply and demand, explain how the Federal Reserve uses open-market operations to either raise or lower interest rates at the direction of the Federal Open Market Committee (FOMC). See if you can find what the most recent decision made by the FOMC was concerning interest rates and explain how that will be reflected in its open-market operations.
- What factors may reduce the banks’ dominance in the future? Prove explanations in detail with an exampleHaving a good commercial bank on your side, like Suntrust or Wells Fargo, will make it much easier for your business to grow and expand Her commercial bank account balance was rarely over two hundred. What is a commercial bank? O a. private bank for consumers and firms © b. government run bank for consumers and firms O c. an investment firm O d.a synonym for credit unionWhat factors have led to the dominance of the banks? Prove explanations in detail with an example
- Explain any four instruments that the central bank can use to regulate the financial system?How do monetary financial institutions create liquidity, pool risk, lower the cost ofborrowing, and lower the cost of monitoring borrowers?Should banks that have become “too big to fail” (meaning their collapsewould significantly damage the economy) be subject to stricter regulationsthan smaller banks? Why or why not?
