Give reasons why governments bail out banks during an economic crisis

Q: why do many analysts believe that securitization and shadow banking were significant factors behind…

A: Securitization is a risk management tool. Such tool is used to reduce the unsystematic  risk . Banks…

Q: Which of the following actions cannot be used by banks to increase reserves?

A: Open market operations are the operations involved in process of increasing the bank reserves.…

Q: Which of the following actions cannot be used by banks to increase reserves? A. Sell Treasury…

A: Reserves  are parts of the income of a corporation that have been set aside to improve the financial…

Q: How can a foreign exchange crisis lead to a banking crisis in emerging market countries?

A: Foreign Exchange is trading of one currency for another. Banking is an industry that handles…

Q: Do you think that removing the impediments to a nationwide banking system will be beneficial to the…

A: Nationwide banking system refers to the process of providing financial services to the customers of…

Q: what is ADVANTAGES AND DISADVANTAGES OF THIS MORATORIUM  in banking to  BANKS . Give an example

A: MORATORIUM- is an option available to borrower to defer the EMI payment. During the moratorium…

Q: What are the possible arguments for setting up a firewall between investment banks and commercial…

A: At the time, improper banking activity–the overzealous commercial bank involvement in stock market…

Q: Central Banks are in fact not at fault when it comes to turning economy into recession and…

A: Each country has its own central bank and a country’s central bank has the power to control that…

Q: You read a news story blaming the central bank for pushing the economy into recession. The article…

A: Your answer: The central bank did not push the economy into recession. The economy was already in…

Q: How has deregulation of the financial services industry affected the makeup of financial…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Analyse what exposure banking institutions had to the subprime mortgage crisis and how MBSs…

A: Funds- The total amount of loanable funds in an economy is the sum of all the money saved and…

Q: Why do managers of financial institutions care so muchabout the activities of the Federal Reserve…

A: SOLUTION:- Federal reserve system is main body or authority in of the U.S. which takes care of the…

Q: Reserve requirements effectively impose a tax on bank deposits that reduce profits.  Why does this…

A: The terms "reserve requirement" and "reserve ratio" are sometimes used interchangeably to refer to…

Q: Reserve requirements effectively impose a tax on bank deposits that reduce profits.  Why does this…

A: As interest rates rise, banks could earn more money by lending reserves to borrowers. These profits…

Q: hy banking regulation has been so important over the years?

A: Step1 The function of the  Bank in the country has become extremely relevant as cross-border…

Q: xplain how a financial crisis typically occurs. What are the stages of a financial crisis? Why…

A: A financial crisis seems to be any of a number of scenarios in which certain financial assets lose a…

Q: Financial Crises have Adverse effects on the Economies. Write a Comprehensive Note on the causes and…

A: Financial crisis is defined as wide variety of the situation, which has the financial assets by…

Q: When any central bank wanted to increase the money supply and loosen credit conditions, what would…

A: In order to increase the money supply and loosen credit conditions, the central bank would purchase…

Q: Should executive pay at companies that have accepted bailout money be capped by the government?

A: There must be a cap for the executive's compensation for those organizations which have accepted the…

Q: What has been the role of IMF loans in international affairs addresing financial crisis? Why are…

A: International Monetary Fund or IMF is defined as an organization, which includes 190 countries as a…

Q: Should the economy’s current fragile recovery gather momentum, it is likely the Federal Reserve will…

A: Federal bank had responsibility of monetary policy so do it by open market operations.

Q: Explain how bushfire calamities may affect a bank's loan portfolio. Carefully consider direct and…

A: The loan portfolio seems to be the total value of all loans given by the bank to persons and…

Q: Why are some banks considered too big to fail?   A. The Glass-Steagal Act prohibits the failure of…

A: A bank is a financial institution licensed to receive deposits and make loans. Banks may also…

Q: QUESTION 6 If the banking system has a large amount of excess reserves, which action would the…

A: To control the supply of bank reserves, banks generally use open market operations. for purchasing…

Q: discuss the rationale behind the introduction of negative interest rate policies across economies…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

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: Explain why a credit crunch occurs in particular why it often occurs after a financial crisis.

A: Credit crunch can be defined as the critical situation where borrowers are not able to borrow money…

Q: Which of the following decreases the likelihood of bank failures by keeping banks from making risky…

A: Option d is correct.

Q: Systematic risk evaluates the probability and extent of negative consequences to the larger body.…

A: Explanation:- The stock market is the marketplace in which publicly listed firms' goods and services…

Q: a. “Financial intermediaries play a crucial role in an economic crisis–they are responsible for both…

A: Financial intermediaries are very important for any economy because they provide funds to those who…

Q: Briefly discuss the cause and the solution(s) to the international bank crisis involving…

A: The origin of the international bank crisis affecting LDC’s is attributed to the largest…

Q: a. Based on the functions of the banking system, give reasons why governments bail out banks during…

A: Banking sector is the most crucial sector of any economy.it is an important institution which turns…

Q: Explain the Currency crisis, Banking Crisis and Foreign Debt Crisis

A: In the world of finance, we often see or hear about one crisis or the other. The 2008 financial was…

Q: What happens to the monetary base when the Fed buys Treasury bonds?   A. Bank reserves do not…

A: The Federal Reserve Bank uses its most important tool to curb or facilitate liquidity in the…

Q: Match each potential outcome to its corresponding argument either in favor of or against the bank…

A: During 2008 crisis, the several banks failed and they requested help from the government. Government…