Chapter Questions
Why was the United States one of the last major industrialized countries to have a central bank?
Why does the United States operate under a dual banking system?
What were the motivations for the original Glass-Steagall Act in $1933 ?$
Which regulatory agency has the primary responsibility for supervising the following categories of commercial banks?a. National banksb. Bank holding companiesc. Non-Federal Reserve member state banksd. Federal Reserve member state bankse. Federally chartered savings and loan associationsf. Federally chartered credit unions
How does the emergence of interest-rate risk help explain financial innovation?
Why did new technology make it harder to enforce limitations on bank branching?
"The invention of the computer is the major factor behind the decline of the banking industry." Is this statement true, false, or uncertain? Explain your answer.
"If inflation had not risen in the 1960 s and 1970 s, the banking industry might be healthier today." Is this statement true, false, or uncertain? Explain your answer.
How do sweep accounts and money market mutual funds allow banks to avoid reserve requirements?
If reserve requirements were eliminated in the future, as some economists advocate, what effects would this have on the size of money market mutual funds?
Why is loophole mining so prevalent in the banking industry in the United States?
Why have banks been losing cost advantages in acquiring funds in recent years?
Why have banks been losing income advantages on their assets in recent years?
The commercial banking industry in Canada is less competitive than the commercial banking industry in the United States because in Canada only a few large banks dominate the industry, while in the United States there are around 6.500 commercial banks." Is this statement true, false, or uncertain? Explain your answer.
Why is there a higher percentage of banks with less than $\$ 25$ million of assets among commercial banks than among savings and loans and mutual savings banks?
Unlike commercial banks, savings and loans, and mutual savings banks, credit unions did not have restrictions on locating branches in other states. Why, then, are credit unions typically smaller than the other depository institutions?
Why has the number of bank holding companies dramatically increased?
What are the advantages and disadvantages of interstate banking?
How did competitive forces lead to the repeal of the Glass-Steagall Acts separation of the banking and securities industries?
What has been the likely effect of the Gramm-LeachBliley Act on financial consolidation?
What factors explain the rapid growth in international banking?
What incentives have regulatory agencies created to encourage international banking? Why have they done this?
How could the approval of international banking facilities (IBFs) by the Fed in 1981 have reduced employment in the banking industry in Europe?
If the bank at which you keep your checking account is owned by foreigners, should you worry that your deposits are less safe than if the bank were owned by Americans?
Why is there only one U.S. bank among the ten largest banks in the world?