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Why is it that Bank Deposit Secrecy became a highly-sensitive issue with respect to the implementation of the Anti- Money Laundering Act ( RA#9160)? Support your answer.
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- Why is it that bank deposit secrecy became a highly sensitive issue with respect to the implementation of the money laundering actAnalyze the potential impact of a prolonged period of negative interest rates on the banking sector's profitability and lending behavior. Additionally, investigate how such an interest rate environment might alter consumer savings rates, corporate investment decisions, and the overall risk appetite within financial markets.From an economics standpoint, the main benefit of a healthy banking industry is the fact that banks themselves make a tremendous profit, allowing the owners of banks as well as their employees to have high incomes. banks force entrepreneurs to pay high interest rates, which contributes to solving the problem of wealth inequality. banks are able to minimize asymmetric information and adverse selection problems, which allows them to transfer idle funds to more productive ends in a cost-efficient manner. private banks help keep inflation under control.
- Why are financial intermediaries the most heavily regulated businesses in the economy? Explain why stock market is an important factor in business investment decisions? What is inflation? What explains inflation? If there is a recession, will it be more difficult to find a job when you graduate? Explain. What are the six types of regulations the government employs in an attempt to ensure the soundness of our financial intermediaries? Explain. Explain the difference between debt and equity markets. primary and secondary markets, exchange and over the counter markets and money and capital markets. What is the difference between foreign bond and a Eurobond? Which institutions are subject to Federal Deposit Insurance corporation (FDIC) regulations, and what is the nature of the regulations? What are the reasons for high transaction costs to exist in a barter economy? What separates the assets included in M1 from the assets included in M2? Does it matter what definition of money policy…Which of the following is not a function of financial intermediaries? A Deal with asymmetric information problems B. Reduce the exposure of investors to risk C. Promote adverse selection after transactions. D. Lower transaction costsWhy are not more resources allocated to the prudential regulation of the banking sector, which is plainly necessary to prevent financial crises?
- How does the “too big to fail” increase moral hazard? Can you cite an example from the 2007-2009 financial crisis? [Hint: The “too big to fail” denotes a situation where some financial institutions are significantly important to the whole financial and economic system, and these financial institutions will not be allowed to fail, as the cost to the economy due to their failure will be huge].evaluate and discuss four reasons why it is necessary to regulate banks, especially within the context of the COVID pandemic.This question refers to Figure 1 below (pp. 272). Which of the following countries experienced the largest increase in house prices during the time period represented in the figure, prior to the banking crises?
- Which of the following is NOT TRUE about Financial Intermediaries? *A. Financial Intermediaries are institutions that serves as a bridge between the SSUs and DSUs.B. Financial Intermediaries makes the financial system more efficient.C. Financial Intermediaries earn profits through various transactions and services they offer.D. Financial Intermediaries offers investment advices.Which of the following best defines a financial intermediary? a collection of stocks and bonds issued to investors an asset sold by a company which entitles the buyer to partial ownership a claim by a buyer to a future payment by a seller a financial institution that transforms investor funds into financial assetsConsider the following statements about interest rate risk assuming that banks have assets with longer maturities than liabilities. Which of the following statements are CORRECT? Bank assets are generally more interest rate sensitive than liabilities so they are subject to greater duration risk. Gap management is used by banks to limit the gap between asset and liabilities duration and hence remove interest risk on and off their balance sheet. Banks may engage in gap management by securitising parts of their loan portfolio, thereby shifting interest rate risk to institutional investors purchasing the securitised packages. Banks may use floating or variable rate mortgages to reduce the duration of their asset portfolio. Chose 1 option from: I, III and IV. I, II and III. I, II, III and IV. II, III and IV. I and IV.