Explain the following statements: "(1) individual financial institutions will generally have unimportant effects on market prices or the economy as a whole and (2) serving their financial interests always safeguards stability of the financial system" according to microprudential approaches?

Q: There is a growing concern among tax payers that ‘too big to fail’ (TBTF) creates moral hazard…

A: Too big to fail (TBTF) is used to safeguard and also protect the big firms (for example the…

Q: evaluate and discuss four reasons why it is necessary to regulate banks, especially within the…

A: It is necessary to regulate banks, especially within the context of the COVID pandemic because of…

Q: Why do banks choose to securitise their assets? Explain how securitisation may exacerbate the…

A: Answer -      Securities :- These are a financial instrument which has non-negotiable and has…

Q: Explain the process of securitisation and discuss its role in the 2008 global financial crisis

A: Securitization is the method of converting the receivables of the financial institutions, i.e.,…

Q: What role does executive compensation play in risk-taking and accountability? Why do some people…

A: Executive compensation plays the important role of attracting talents who shoulder most of the…

Q: The following are the advantages of financial intermediaries, except:  A. Provide guaranteed returns…

A: Financial Intermediaries:- Financial intermediaries function as go-betweens for financial…

Q: What do the authors mean when they state that financial intermediaries can achieve economies of…

A: The financial intermediaries reduce the transaction cost when it increases the volume. When the firm…

Q: What are the causes and impact of financial crisis 2007 – 08 on world economy with special reference…

A: The financial of 2007-08 started in US and rapidly stretched to European Union and later to other…

Q: What should be the role of government in regulating financial institutions?

A: In the financial market, financial institutions are the players that act as the both the supplier as…

Q: The bond rating agencies(choose right answer) a:used outdated computer modeling software and…

A: When talking about bonds rating agencies, these are the institution that make analysis of different…

Q: Explain why emerging market economies is important in financial markets?

A: Financial markets represent the marketplace in which the buyers and sellers trade various financial…

Q: In what way might consumer protection regulationsnegatively affect a financial intermediary’s…

A: According to the consumer protection regulations and acts in financial services state that all…

Q: Identify and explain the main factors that contributed to the financial crisis of 2007-2008.

A: Financial crisis refers to a situation in which investors sell their assets and withdraw their money…

Q: What is the main purpose of financial regulation? What kind of instruments may a government use to…

A: Financial Regulation : Financial Regulation can be defined as a form of regulation, laws or rules…

Q: Why would haircuts on collateral increase sharply during a financial crisis? How would this lead to…

A: Haircut means the disparity b/w the amount of a loan & collateral which is set up for it. For…

Q: List any six categories of factors that could cause a financial crisis.

A: Since , financial crisis in a economy is a situation where  the value of the assets fall drastically…

Q: Which of the following is NOT TRUE about Insurance companies? * a. They are non-depository…

A: When product or a particular service is manufactured, cost  takes place and process of business…

Q: Contrast the risk tolerance and Liquidity needs for Banks and Individual investors

A: Introduction There is always a risk in life when there is an opportunity to gain. Knowing how much…

Q: A commercial bank is defined as a financial institution which performs the functions of accepting…

A: The circular flow of pay or roundabout stream is a model of the economy where the significant trades…

Q: Explain potential conflict of interest in the operational structure of systematically important…

A: i) Conflict of interest In a conflict of interest, a person or organization has numerous interests…

Q: EXPLAIN DYNAMICS OF FINANCIAL CRISES

A: In the financial crises, resource costs see a precarious decrease in worth, organizations and…

Q: Q11. Which of the following is/are linked with the financial sector of India and controlled by the…

A: The financial sector consists of businesses and institutions that provide financial services to both…

Q: How does a general increase in uncertainty as a resultof the failure of a major financial…

A: Adverse selection refers to the problem where bad credit risks are more eager to take the loans and…

Q: How the lemons problem could cause financial markets to fail? Explain it with using your own words,…

A: In perfectly competitive markets, the information is equally shared by the economic agents-…

Q: Explain what is the function of the following components in a country's financial system.…

A: A system that in turn allows fund exchange between market participants including investors, lenders,…

Q: What can emerging market countries do to strengthenprudential regulation and supervision of their…

A: The market of a growing country that gets further active with foreign markets as it expands is an…

Q: Why is it a good idea for macroprudential policies torequire countercyclical capital requirements?

A: Macro-prudential policies are policies being financial by nature.

Q: Would you recommend the adoption of a system ofdeposit insurance, like the FDIC in the United…

A: No, i would not recommend the adoption of a system of deposit insurance, like the FDIC in the United…

Q: Which of the following statements is incorrect? a. Holdings of liquid assets (or access to credit…

A: The right answer is Option C

Q: Explain on how the BASEL III affected the financial institution to the country generally?

A: Basel III is a 2009 international regulatory agreement that established a set of measures aimed at…

Q: Assume that Annovo Financial and Bennovo Financial were banks with the same financial condition,…

A: Financial institutions, sometimes known as banks, are companies that operate as middlemen in a…

Q: he Dodd Frank Act does not address some of the issues related to the financial crisis and recession…

A: Dodd Frank Act came in July 21, 2010 to strengthen the financial system and rules governing it, so…

Q: 24. Financial institutions that cut back on their lending are engaged in A) liability management B)…

A: In an economy, lending refers to transferring excess funds of an individual or institutions to the…

Q: “In a world without information costs and transactioncosts, financial intermediaries would not…

A: Financial intermediaries are institutions that connect the borrowers and lenders by acting as the…

Q: How can the existence of asymmetric information provide a rationale for government regulation of…

A: Asymmetric information is a situation the information possessed by the parties is not symmetric. In…

Q: Summarize the government policies thatreduce the likelihoodof financial crisesin emerging…

A: The financial crisis is a situation in the economy in which the price of asset decline steeply,…

Q: If bad credit risks are the ones who most actively seek loans, then financial intermediaries face…

A: When the parties involved in any economic activity do not have same or symmetric information about…

Q: Why are financial intermediaries willing to engagein information collection activities when…

A: The financial intermediaries provide different instruments to their customers. They provide…

Q: Explain the following statements: “(1) individual financial institutions will generally have…

A: A macroprudential approach supervises and regulating to ensure stability for general equilibrium and…

Q: Explain how financialinnovation led to thegrowth of the shadowbanking system

A: Shadow banking provides institutions the means to form accounting entities to isolate risks,…

Q: What regulations appear to allow a central bank's attempts to restrict the quantity of lending by…

A: In an economy, the central bank has the right to influence the functioning of financial institutions…

Q: Câu 2: Assignments CAR is a measurement of a bank's available capital expressed as a percentage of a…

A: A bank is an institution that provides the facility for loans and deposits. It means as the bank…

Q: Discuss the following statements: “(1) individual financial institutions will generally have…

A: Financial institutions are central banks, all the retail banks and insurance agencies. These do have…

Q: Securities Exchange Act of 1934 The following are correct statements related to the Decline in…

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

Q: An understanding of the adverse selection and moral hazards can help us better understand financial…

A: Moral Hazard:- It can be explained as a situation where one party shares incorrect details of alters…

Q: What are the convergence of issues that led to and caused the subprime financial crisis of 2007-2008

A: Financial crisis of 2007-2008, particularly known as mortgage crisis was basically the result of…

Q: The 2016 elections in the United States Multiple Choice led to resistance to Dodd-Frank becoming…

A: In the political election of 2016 of the United States, Donald Trump won the leadership against Dodd…