a) How do financial institutions benefit the overall economy? b) How do Fls reduce monitoring costs associated with the flow of funds from fund suppliers to fund investors? c) What is the Basel Agreement?
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- Which of the following is NOT typically a role for a financial intermediary...? make public financial statements of borrowers evaluate the riskiness of lending to borrowers pool funds from lenders monitor the financial conditions of borrowersBasel II Which of the following was done under Basel II guidelines? Revisions were made to the type of analysis banks should do based on the potential of negative economic scenarios. Revisions were made to what assets banks could invest in. Revisions were made recommending that banks maintain a capital conservation buffer of at least 2.5 percent of their risk-weighted assets. Basel III Revisions were made to the way credit risk was measured. Which of the following was done under Basel III guidelines? Revisions were made to what assets banks could invest in. Banks' capital ratio requirements began to factor into operational risk. Revisions were made recommending that banks maintain retained earnings and common stock of at least 6 percent of their total risk- weighted assets. Revisions were made to the way banks could acquire risky assets.Contrast the risk tolerance and Liquidity needs for Banks and Individual investors
- Basel I, II and III were all established as a result of financial banking crisis that occurred in 1988, 2004 and between 2008-2010 respectively. While Basel III serves as a set of comprehensive reform measures established by the Basel Committee on Banking Supervision to enhance regulation, supervision and risk management of the banking sector, it upholds these objectives in the statments noted below, Except: a. Introduces additional measures to ensure adequate liquidity coverage by financial institutions over a 30 day period in certain scenarios. b. Expanding tier 1 category to include common stock and accumulated earnings. It also allows for an additional buffer which serves as a safety net to protect the banking system against any possible bank failure as a result of an increase in the extension of credit. c. Requiring the computation of other currency of significance to be undertaken to determine the LCR. d. Taking into account the risk coverage by ensuring…Explain the ways in which financial institutions manage credit risk.Why are financial intermediaries the most heavily regulated businesses in the economy? Explain why stock market is an important factor in business investment decisions? What is inflation? What explains inflation? If there is a recession, will it be more difficult to find a job when you graduate? Explain. What are the six types of regulations the government employs in an attempt to ensure the soundness of our financial intermediaries? Explain. Explain the difference between debt and equity markets. primary and secondary markets, exchange and over the counter markets and money and capital markets. What is the difference between foreign bond and a Eurobond? Which institutions are subject to Federal Deposit Insurance corporation (FDIC) regulations, and what is the nature of the regulations? What are the reasons for high transaction costs to exist in a barter economy? What separates the assets included in M1 from the assets included in M2? Does it matter what definition of money policy…
- Please help me understand what was (were) the unethical practice(s) of Countrywide Mortgage? What is a positive or negative experience (negative if possible) to have with a financial institution?Which of the following conditions is not conducive to direct lending-borrowing through financial markets: When monitoring the financial condition of the borrower is fairly easy and low cost the firm borrowing is small and not well known to lenders There is good publicly available information about the borrower When assessing the riskiness of the borrower is relatively easy and low costExplain the key principles identified by the Basel committee that needs to be followed to ensure sound corporate governance.link your explanation to the practical operation of a named bank
- A bank that wishes to reduce its credit risk could: A. Sell risky loans from its loan portfolio B. Enter into a repurchase agreement O. Buy a credit default swap D. Sell a credit default swap E. Both A and C will reduce credit riskWhat is one of the attractions of the Eurobond market? Multiple Choice A) There are more stringent disclosure requirements than for domestic bond markets. B) They offer higher interest rates on deposits. C) There is no translation exposure. D) There is regulatory control by the national government.explain the functions performed by financial intermediaries and how they can promote economic efficiency in financial markets.
