Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
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Chapter 11, Problem 13Q
To determine

Reason why banks have been losing income advantages on assets?

Concept Introduction:

In the United States, the importance of commercial banks as primary lenders of funds to non-financial borrowers has reduced dramatically. In l974, banks provided 35 percent of these funds; today they provide only around 22 percent. This has been accompanied by a decrease in the asset-side of balance sheet of banking companies, as compared to newer financial intermediaries like mutual funds, brokerage agencies.

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