Securities Exchange Act of 1934The following are correct statements related to the Decline in Traditional Banking inUSA, EXCEPT:As a source of funds for borrowers, marketnare of commercial banking hasfallen.O Commercial Banks are facing increasing competition from other financialintermediaries.Commercial Banks are devoting increasing amount of their funds to financeconsumption and production.Commercial Banks are now engaging more in non-traditional banking activities.

Now traditional banking system is declined, because, banking industry especially commercial banks…

Answered: Securities Exchange Act of 1934 The…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Monetary System

Section: Chapter Questions

Problem 5PA

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Why are banks called financial intermediaries?
Name anddescribe two markets that are part of the financialsystem in the U.S. economy
The bank's assets are $1M of cash, $50M of commercial loans, $9M of Treasury bonds, and $100M of mortgages. The bank also has $140M of non-transaction deposits and $10M of preferred stock that matures in ten years. The allowance for loan losses is $3M. a. Calculate the total assets 1. b. Calculate the risk-adjusted assets 120 c. What are the common equity Tier I (CET1) risk-based capital ratio, Tier I risk-based capital ratio, the total risk-based capital ratio, and the total capital (leverage) ratio?
Explain what is meant by Creation of NPAs as a challenge faced by financial system
Explain what is the function of the following components in a country's financial system. regulators, commercial banks, investment banks and non-banking intermediaries
6. If a commercial bank decides to compete more aggressively to expand its share of the lending market, what factors might constrain its ability to do so?
What is securitisation? Explain briefly the securitisation process and the reasons whybanks choose to securitise their assets. Discuss the role of mortgage-backed securities inthe financial crisis of 2007-2008.
Suppose that after a few mergers and acquisitions, onlyone bank holds 70% of all deposits in the United States.Would you say that this bank would be considered toobig to fail? What does this tell you about the ongoingprocess of financial consolidation and the governmentsafety net?
In what way might consumer protection regulationsnegatively affect a financial intermediary’s profits?Can you think of a positive effect of such regulationson profits?
Commercial Banks both issue (as liabilities) and invest in (as assets) different Money Market instruments. Identify two of the money market instruments that are commonly used by Commercial Banks. For each instrument, indicate whether Commercial Banks issue them as liabilities or invest in them as assets. What are the characteristics of Money Market instruments that make them useful and attractive to Commercial Banks?
1) The interest rate earned on a money market deposit account is generally higher than the interest earned on a Bank savings account. 2) What are short-term notes of debt issued by the federal government commonly called? A) T-Bills B) T-Notes C) T-Bonds D) T-Accounts E) None of the above are correct. 3) What is the name for comprehensive financial services packages offered by brokerage firms? A) asset management accounts B) comprehensive management accounts C) platinum management accounts D) consolidated management accounts E) None of the above are correct. 4) Money market mutual funds provide an alternative to traditional liquid investments offered by financial institutions. Advantages of MMMFs include which of the following? A) high interest rates B) check-writing privileges C) minimal risk D) convenience--deposits made through payroll deductions E) All of the above are correct. 5) A savings alternative that pays a fixed rate…
When regulators engage in macroprudential regulation, they focus on O the safety and soundness of the entire financial institution. O the credit standards of all loans held by the financial institution. O the safety and soundness of the financial system in aggregate. O the safety and soundness of cach liability of the financial institution. A

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