Drawing on theoretical arguments and empirical research, explain in detail the efficacy of the negative interest rate policy (NIRP) that has been undertaken by certain central banks. Also evaluate whether such a policy would have any adverse effect on the banking sector.

The Federal Open Market Committee (FOMC) is one branch of Federal Reserve System responsible for: Group of answer choices Approving discount rate Setting Federal Funds Rate Target Range Recommending Discount rate

From an economics standpoint, the main benefit of a healthy banking industry is the fact that     banks themselves make a tremendous profit, allowing the owners of banks as well as their employees to have high incomes.     banks force entrepreneurs to pay high interest rates, which contributes to solving the problem of wealth inequality.     banks are able to minimize asymmetric information and adverse selection problems, which allows them to transfer idle funds to more productive ends in a cost-efficient manner.     private banks help keep inflation under control.

The term “moral hazard” describes increases in risky behavior resulting from efforts to make that behavior safer. How does the concept of moral hazard apply to deposit insurance and other bank regulations? Can you think of any arguments in favor of getting rid of the FDIC? How might doing so improve the safety of banks?