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Banks and BankingIn banking terms, “credit” means something like “the amount of money that a bank is willing to lend to a given individual.” If I have X amount of credit at a bank, they are willing to lend...
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EconomicsCentral banks and commercial banks are very different entities. They have very different missions and deal with very different customers. A commercial bank is the sort of bank that we think of...
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Banks and BankingWith 59 of its banks currently on the Federal Deposit Insurance Corporation's Failed Bank List, Illinois is certainly well-represented in the category of bank failures. While other states,...
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Social SciencesHow have banks in your region fared during this troubled time period? Have there been a number of...Of course, there have been different numbers of bank failures in different regions of the country. I live in Washington State, but I have no idea where you live. That will make it hard to give an...
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Banks and BankingThere are a number of pros and cons to banking with a bank that has no “brick and mortar” presence. Let us look at a few. Online banks tend to have better rates. They have fewer expenses...
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Banks and BankingBanks which have both a physical presence and an online presence offer customers the best of both worlds. They offer the convenience of online banking, but they also have the physical branch...
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Social SciencesReserves are money that a bank keeps in its vaults, so to speak, while excess reserves are one part of that money. When a bank takes in money in the form of deposits, it keeps some of that money...
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Banks and BankingOne strategy that has successfully been used by many regional and national enterprises in banking and other industries (so it has been widely tried) is that of developing a Careers center on a...
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BusinessA bank is a company that provides financial services of various sorts to various types of customers. Its major function is to gather money from various people and to lend that money out to other...
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Banks and BankingWhat would happen if everyone who had money deposited at a bank wanted to withdraw it at the same...If literally everyone who had money deposited in a bank were to ask to withdraw that money at the same time, the bank would most likely fail. It would simply run out of money. The reason for this...
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BusinessAn investment banker is " an individual who works in a financial institution or investment arm of a corporation who is responsible for raising capital" or involved with the associated research and...
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Banks and BankingMost people would not be affected tremendously if there were no federal deposit insurance. These days, people do not tend to keep that much money in banks. Theoretically, the lack of deposit...
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Banks and BankingThe more that we human beings are protected from the consequences of our actions, the more risks we are likely to take. Think about it this way: if you were going to try to do a trapeze act,...
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Banks and BankingWhy did banks continue to make loans even when they may have known that some people couldn't keep...For the purposes of this answer, I will assume that you are asking about the lending practices of banks at the time of the housing bubble of the early to mid-2000s. During this period, there were...
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BusinessThe last five has been a time of fast paced changes in the banking and finance sector. The global financial crises spurred by the collapse of the U.S housing market ushered in a new era of industry...
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Banks and BankingTraditionally, there have been two purposes for interest rates with regard to banks. Today, only one of them is really relevant. The purpose for interest rates that is now obsolete is to attract...
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Banks and BankingThere are two ways to answer this. The required reserve ratio for a bank is determined by the central bank of the country in which the bank does business. In the US, the Fed determines the...
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Banks and BankingThe correct answer to this question is A. All of the other answers would be consistent with a situation in which the Fed actually lowers the reserve requirement. A reserve requirement requires...
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Banks and BankingA single commercial bank must meet a 20% reserve requirement. If this bank has no excess reserves...The correct answer to this question is A. A reserve requirement tells the bank what percentage of its deposits it must hold and how much it may lend out. Before the deposit in this scenario, the...
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Banks and BankingThe only possible answer to this question is B. Money that is deposited in a bank is always a liability from the point of view of the bank. To understand this, think about what the bank must be...
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Banks and BankingRisk based capital adequacy standards have to do with the proportion of its deposits a bank must hold and not lend out. A risk based standard is one that takes into account how risky a bank's...
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Banks and BankingTo argue that the government should not do this, you should focus on the idea that the government is not the most effective judge of who is and is not creditworthy. The government lacks the...
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Banks and BankingThere are at least two ways to look at this. From the point of view of a bank, the purpose of banking is to make a profit. Banks are companies just like any other, trying to make money. They...
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Banks and BankingI believe that the previous answer misunderstands the meaning of the quote. The meaning is that banks are more willing to loan money to those who do not need it as badly, at times when they do not...
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Banks and BankingYes, banks have. Of course, they are not perfect. Some of them charge excessive (in the eyes of the consumer) fees or take risks with their depositors' money. But overall, they are certainly...