Why are the banks reluctant to lend, and what should be done to increase bank lending?

Q: Advantage and Disadvantage of Non-stock savings and loan associations from private non bank thrift…

A: The association which is engaged in the non-stock, non-profits activities related to the business in…

Q: Which of the following statements is false? A.   Moral hazard is the lack of incentive to guard…

A: Analysis of the options:   A: Moral hazard is the lack of incentive to guard against risk where one…

Q: What are the main sources of funding for commercial banks?

A: Banks are a financial institution that receives money from customers and makes a loan to the…

Q: Why might customers of big banks be reluctant to moveto a credit union?

A: Introduction: A credit union is a financial mutual institution which is owned and operated for its…

Q: Ways that banks compete for customers

A: Introduction: Banking is a highly competitive sector with virtually similar goods offered by all…

Q: 1.Explain the basic principles of good banking credit and the internal causes of the Bank that cause…

A: One of the important functions of the bank is to provide credit to the borrowers, however, they…

Q: what is MORATORIUM” IN BANKING? explain.

A: During a moratorium period, your lender will calculate the interest on your loan using the notion of…

Q: If Steve can't decide what bank to take a loan from, what banking service would make a bank a better…

A: 0% Financing represents the discounted finance or loan that is provided to the customers at a…

Q: why is it important for companies to prepare bank reconciliation periodically?

A: Any businessman or a company contains a book called as Cash Book. This cash book contains the…

Q: Which of the following is not a reason for banks to be regulated? a.To protect depositors. b.To…

A: A bank is a type of financial institution that handles all procedures linked to depositing and…

Q: Why do managers of financial institutions care so much about the activities of the Central Bank?

A: The central bank has lots of powers to alter the incentives that are given to companies i.e.…

Q: what is ADVANTAGES AND DISADVANTAGES OF THIS MORATORIUM FOR THE BANKS AND BORROWERS? provide…

A: A moratorium is a temporary cessation of activity until future circumstances necessitate its lifting…

Q: why do banks consider interest on loans to be important?

A: Bank is defined as the financial institution, which accepts the deposits from public as well as…

Q: Why are some entrepreneurs hesitant to avail of commercial bank loans? Why do some of them resort to…

A: Commercial bank is a type of bank which accepts deposits from public and advance deposits to public…

Q: What bank regulation is designed to reduce adverse selection problems for deposit insurance? Will it…

A: Banks are the financial institutions that are involved in providing financial services to their…

Q: What is the purpose of preparing a bank reconciliation?

A: Bank reconciliation is prepared to reconcile the company's cash book that is reconciled with its…

Q: hat is the importance of regular bank reconciliations?

A: The bank reconciliation statement is prepared to equate the balances of cash book and pass book with…

Q: Discuss the potential market failure in the diamond model of banking regulations

A: The diamond model in banking is also known as the dual principle-agent relationship model because it…

Q: Do U.S. GAAP and IFRS differ in how bank overdrafts are treated? Explain.

A: Generally Accepted Accounting Principles:   GAAP (Generally Accepted Accounting Principles) is a…

Q: Which of the following statement is not true about Central bank? a. It ensures stable financial…

A: Central bank is the lender of last resort.

Q: Why will bank never opt for the rejection of payment of LC to exporters bank?

A: A Letter of Credit or Credit Letter refers to a assurance letter given by the bank to its buyer that…

Q: What are nonconventional monetary tools used by central banks?

A: Monetary policy can be conventional and unconventional which are used by the central banks for…

Q: What’s the difference between a commercial bank and an investment bank?

A: A financial institution that provides services such as accepting the deposits and providing the loan…

Q: The central bank intervened heavily in the credit crisis. Explain whether you believe the central…

A: Central Bank: As the financial institution with exclusive power over the generation and circulation…

Q: How does peer to peer lending is different from traditional banking lending for Credit Mutuel Group?

A: Peer-to-peer lending is a type of crowd-funding that allows those who wish to invest to lend money…

Q: Which do you prefer? the traditional way of transacting with banks and other financial institutions…

A: Online or e banking is where the users make all the financial transactions via internet. they offer…

Q: Depositing money into a commercial bank is investing in a

A: Step1: Commercial banks form part of an organized money market. Commercial banks deals in money and…

Q: Why is the Fed’s discount window considered the “lender of last resort” for some banks?

A: The “discount window” refers to the facilities that central banks are offering to commercial banks…

Q: What are the different types of deposit accounts and loans offered to customers by any one…

A: SOLUTION PRIMARILY , BANKS OFFERS TWO TYPES OF DEPOSIT ACCOUNTS .THESE ARE DEMAND DEPOSIT LIKE…

Q: shadow banking and how does it differ from traditional retail banking? What kind  of threat does…

A: Shadow Banking: Shadow banking refers to bank-like activities that occur outside of the formal or…

Q: Interbank borrowing is collateralized borrowing the main source of funds for most banks is subject…

A: Interbank borrowings is the market in which bank lends funds from one another . In this maturities…

Q: How banks safeguard the deposits of customers from financial losses?

A: The banks safeguard the deposits of customers with the help of an independent agency.

Q: What is evergreening in banking and why it may arise as an equilibrium choice of banks. Carefully…

A: Answer:-  Evergreening:- Evergreening technically refers to the practice of "managing" the balance…

Q: 1 Would bank supervision be made easier if banks' CAMELS ratings were made available publicly? What…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Why is there a need for  banking regulations to regulate savings  and  the lending of money by…

A: Banks are one of the most important financial institutions. Banks play an integral role when it…

Q: Why banks are subject to intense regulations? Explain the circumstances where banks are sometimes…

A: Bank regulation is a form of government regulations which subjects banks to certain requirements,…

Q: What are conventional monetary tools used by central banks?

A: The three conventional monetary policy tools which are used by the central banks are the discount…

Q: If a bank finds that its ROE is too low because it has toomuch bank capital, what can it do to raise…

A: ROE (Return on Equity):-It is the ratio that helps in analyzing a company's profit from shareholder…

Q: Why is the bank important to our society?

A: The bank is highly important to our society. It should be noted that banks, on an overall basis, are…

Q: Commercial banks are often restricted by Central banks to hold sufficient capital. Why is such a…

A: A commercial bank may be a financial institution that accepts deposits, provides bank account…

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.