Why are some banks considered too big to fail?   A. The Glass-Steagal Act prohibits the failure of any bank wiht more than $5 billion in assets   B. Very large banks have enough assets to prevent financial distress and cannot fail   C. These banks are so large that their failure may initiate a financial crisis in the broader economy   D. Congress has always stepped in to bail out banks owned by politically connected individuals

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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.