The 1999 repeal of the Glass-Steagall Act by the US Government was a mistake as it allowed US banks to grow too big and take excessive risks leading to the subprime and global financial crises of 2007-2009. True or False? (Word limit 300)
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The 1999 repeal of the Glass-Steagall Act by the US Government was a mistake as it allowed US banks to grow too big and take excessive risks leading to the subprime and global financial crises of 2007-2009. True or False? (Word limit 300)
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- Identify regulators in sectors apart from financial services, that should be involved in the Central Bank’s Fintech Regulation Committee. Motivate why these regulators .should be involved.Government bailouts of large banks called "too-big-to-fail policy" Group of answer choices reduces the incentives for moral hazard by big banks. increases the incentives for moral hazard by big banks. reduces the incentives for adverse selection by big banks. increases the incentives for adverse selection by big banks. causes none of the above.evaluate and discuss four reasons why it is necessary to regulate banks, especially within the context of the COVID pandemic.
- Which of the following is one of the uses of financial instruments? means of payment store of value transfer of risk All of the above None of the above“In a world without information costs and transactioncosts, financial intermediaries would not exist.” Is thisstatement true, false, or uncertain? Explain your answer.Outline and critically evaluate the main arguments in the literature on bank competition and excessive risk taking by banks
- Economic analysis is generally viewed as an integral part of the top-down approach to security analysis. In this context, identify each of the following and note how each would probably behave in a strong economy .Interest rates Industrial production Retail salesWhich 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 costsWhich 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 assets
- When a commercial bank borrows from the Federal Reserve, it pays the ________ rate, whereas if it borrows from another commercial bank it pays the ________ rate. Group of answer choices prime; federal funds federal funds; discount discount; federal funds interest; discountWhich of the following scenarios best illustrates the concept of "Moral Hazard" in the context of money and banking? Multiple Choice A government implementing a tax cut to stimulate economic growth. A bank offering competitive interest rates to attract new customers. A borrower taking on excessive risk because they know their loans are backed by a government bailout. An individual investing in a diversified portfolio to manage risk.Roy does not trust banks and has been keeping his earnings in coffee cans in a freezer. His friend Julia convinces him that banks are safe, and Roy finally opens a chequing account. When he deposits his money into the account that transaction will directly increase the money . FALSE TRUE