What are some arguments in favor of continuing government support of Citigroup? Discuss who would be hurt by the bank's failure. Is the failure of Citigroup different from that of other firms? Does the government have people to manage such a global financial enterprise?
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- Which of the following is a reason for financial regulation? a. To ensure market dominance by strong financial institutions. b. The failure of any financial institution may have a serious negative impact on individuals and economies. c. Banks cannot be trusted. d. To ensure government control of the economy.When any central bank wanted to increase the money supply and loosen credit conditions, what would it do in the private market for government bonds? Explain how this is supposed to affect the economy.One party in Congress seems to believe that financial institutions are too highly regulated, and need to be freed to be able to compete on the world markets more efficiently. The other party seems to believe that financial institutions need to be regulated even more than they are. In any event, financial services are some of the most highly regulated industries in the country. Are financial services too highly regulated? Or not regulated enough?
- Why do community banks not want Wal-Mart to be in the banking business? What are the possible benefits to Wal-Mart of such move? What drawback to community bankers anticipates if Wal-Mart can operate full-scale bank in the United States?There has been concerns among businesses that the recent reductions in the NIPR has not led to significant decreases in bank lending rates. What do you think could be accounting for this? What additional measures can policy-makers undertake to reduce the Cost of borrowing in the country?Which of the following is true of the current state of financial regulation for financial institutions (FIs)? Most banks can transfer risk on a greater scale and in more complex ways than before. Most FIs now conduct virtual global business, reducing the influence of very large FIs. Most global financial money and capital markets are deliberately disconnected. Most securities exchanges have required majority ownership by resident nationals.
- The central bank intervened heavily in the credit crisis. Explain whether you believe the central bank’s intervention improved conditions in financial markets or made conditions worse.With no government regulation, how much bank capitals would banks hold? A. Too much capital, reducing the profitability of banks. B. Too much capital, making it more difficult to obtain loans. C. Too little capital, reducing the profitability of banks. D. Too little capital, making it more likely to fail.Systematic risk evaluates the probability and extent of negative consequences to the larger body. For example, the government has a record of intervening in the event of a probable bank failure; the government’s larger concern is the negative impact on bank customers. Some call this a government bailout. Research a recent government bailout and explain why the government felt it was necessary. What risks do you think the government had to consider in making its decision?
- Examine the processes for the acquisition of licence by Banks and other financial institutions in Ghana establishing the role of the regulator in this industry. In your opinion, do we still need a regulator if the banks are collapsing anyway?Which statement is not correct? A. The primary function of the financial system is to facilitate well the flow of funds in the economy, from those who have surplus funds but can’t utilize them to those who have deficiency of funds but have productive use for the funds. B. The president and the congress sets fiscal policies that are geared towards counteracting excessive spending and borrowing during economic boom and encouraging spending during economic depression. C. Financial Institutions like banks, insurance companies and mutual funds, are entities that receive funds from savers and invest the funds in securities issued by borrowers. D. The Philippines Stock Exchange is the primary capital market of the Philippines where the debt and equity securities of publicly listed corporations are traded. E. none of the aboveWhat would happen to a country standard of living if people lost faith in the safety of the financial institutions? Explain.