In recent years, ‘direct lenders’ and ‘shadow banks’ have increasingly provided funding for businesses, replacing the role traditionally played by commercial banks. To what extent is this true and who are these ‘direct lenders’ and ‘shadow banks’?

Q: Explain why very small to medium-size enterprises (SMEs) might face problems in obtaining…

A: The question aims to understand the challenges that small to medium-sized enterprises (SMEs) face…

Q: Which of the following is generally the least expensive source of funding? A) demand deposits B)…

A: Demand deposits refer to funds held in bank accounts that can be withdrawn by the account holder at…

Q: What factors led to the success of Grameen Bank?

A: The bank is a financial organization that accepts the deposits from the public in order to provide…

Q: Why do federally guaranteed loans usually have the least risk for banks, List some popular…

A: Federal guaranteed loans are loans that are backed by the federal government, which means that the…

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: Why do community banks not want Wal-Mart to be in the banking business? What are the possible…

A: The world's largest retailer, Walmart is an American multinational  company. It  operates a chain of…

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: If households and businesses lend their surplus cash directly to borrowers, there would be no need…

A: Solution:   Financial institution facilitates the flow of funds between the individuals and or the…

Q: What is financial intermediation and what are the main intermediation channels? Why do banks…

A: Financial intermediation is an important concept in finance. This is specially in the context of…

Q: what are the disadvantages and advantages of big banks and small banks?

A: Answer:

Q: Compare and contrast the business models of Fintech firms with commercial banks.

A: Fintech Firm uses modern technologies and software to provide automated and improved financial…

Q: Why is it vital for banks to diversify worldwide.

A: Diversify is a term used to describe a technique which reduces risk by allocating investments across…

Q: do you think that the collaboration between Central Banks and Government creates challenges for…

A: If a country's economy were a human body, the central bank would be its heart. And, just as the…

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: Given a financial institution that make money in three ways: interest income, interest income, and…

A: Banks and Financial institutions make most of their money from loaning and re-loaning money. Low…

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: Why are the banks reluctant to lend, and what should be done to increase bank lending?

A: Banks generally borrow and lend cash in the interbank loaning market so as to oversee the liquidity…

Q: There has been concerns among businesses that the recent reductions in the NIPR has not led to…

A: In the given question we need to answer the following question : There has been concerns among…

Q: By giving clients with a variety of perks and advantages, as well as taking measures to keep them as…

A: Customer satisfaction: Customer satisfaction is the largest competitive advantage for banks. It…

Q: Why have off-balance-sheet activities been a growing source of bank profits and what are the…

A: Off-balance sheet is defined as an assets, debts, or the financing activities, which does not…

Q: How can we raise the capital specification for shadow banks and depository institutions and make…

A: Capital specification is the capital or equity requirements that are to be maintained by the banks.…

Q: What are the advantages and disadvantages of direct lending for the consumer? What can banks do to…

A: Direct lending refers to a type of lending that is provided directly by the lender, such as a bank,…

Q: 1) comment on banks’ and insurance companies’ behaviour and identify main drivers of their…

A: Many internal and external factors have an impact on banks and insurance businesses, influencing…

Q: Why are banks currently holding capital well above the minimum regulatory requirement?

A: Capital is the main and important ingredient of banks, without capital , we cannot run a bank,…

Q: why the non-government financial institutions are allowed to operate in our economy.

A: A non- government financial institution are those that does not have full banking license or is not…

Q: Why is the Fed’s discount window considered the “lender of last resort” for some banks?

A: The “discount window” refers to the facilities that central banks are offering to commercial banks…

Q: A bank that grants loans to firms in a many different lines of business:  will increase its…

A: When a bank grants loans to firms in different lines of business then it has to incur more expenses…

Q: What is the importance of the current financial sector regulations in Jamaica?

A: Financial regulation:  Financial institution operations are governed by laws and regulations known…

Q: Could you give some example that explain thoroughly why capital adequacy management in commercial…

A: Capital adequacy measures the amount of a bank's capital in relation to its risk. The higher the…

Q: Discuss the view that ALM is of No significant in contemporary banking industry

A: ALM is the abbreviation used by Asset Liability Management. A system set to channelize and…

Q: What are the reasons SMEs in Zambia face challenges with access to finance? Are these reasons…

A: Access to finance is a common challenge for small and medium-sized enterprises (SMEs) not only in…

Q: Why some banks have failed in their jurisdiction?

A: As per the RBI, because of their scale, jurisdictions, difficulty, and absence of replacement and…

Q: Why would the U.S. government consider reinstitutingthe “wall” between investment banking and…

A: A commercial bank is a financial institution which provides various financial services like…

Q: Why do some financial institutions offer more frequent compounding in the financial market?

A: In estimating compound interest, a significant distinction is in the number of compounding periods.…

Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.