As part of the financial crisis )خطة إنقاذ الأزمة المالية( bailout plan in 2008, the Federal Reserve should not bail out (jäï jÍ i )

Q: During this COVID‐19 pandemic, the South African Reserve Bank (SARB) plays a crucial role in…

A: Due to covid 19, many countries are affected globally all country's central banks have taken the…

Q: Your childhood friend believes Commercial banks no longer have any relevance in the current economic…

A: Commercial banks are the financial institutions that provide various banking services to people and…

Q: The sale of government bonds by the Federal Reserve Banks to commercial banks will ______.

A: By selling government bonds within the open market, the Federal Reserve System banks reduce full…

Q: What happens when a bank borrows from the Fed’s “discount window”

A: The discount window is a lending facility provided by the Fed to banks and other depository…

Q: What did the Fed do in 2007 to deal with the underutilization) of the discount rate window

A: The 2007 financial crisis began in earlier years with economical credit and lending of tax standards…

Q: In reaction to the financial meltdown and severe recession, Congress passed the _____ to eliminate…

A: The Dodd-Frank act is a complex bill with hundreds of pages and 16 areas of reforms. This act puts…

Q: If the IORB rate is 4.25 percent, the effective federal funds rate is 4.18 percent, and the ON RRP…

A: The federal funds market plays a crucial role in facilitating short-term borrowing and lending…

Q: The Federal Reserve wants to increase the money supply by increasing the lending potential of…

A: Required reserve ratio is the minimum percentage of reserves maintained by the commercial banks with…

Q: How can an effective lender of last resort prevent financial panics from developing? Why was the Fed…

A: A lender of last resort (LoLR) is a financial institution that provides liquidity or emergency…

Q: Explain in words what you understand by the liquidity trap.

A: Economic policy refers to the actions, decisions, and strategies implemented by governments or…

Q: stablishin

A: The Federal Reserve System is the United States of America's central system of banking.It was being…

Q: Before you call the meeting, the existing Fed Funds rate is 3.5% and the Discount rate is 4.5%. The…

A: Despite the fact that central banks have existed since antiquity, the modern notion of a centralised…

Q: What are the functions of the Central bank? Explain the nuts and bolts of monetary policy in detail.…

A: The central Bank is the monetary institution that controls the money supply in the economy. The…

Q: What’s the difference between a liquidity crisis and a solvency crisis? When Lehman Brothers went…

A: Liquidity can be defined as the ability of businesses or organisations to pay off its current…

Q: When the economy is in recession and the Fed wants to do expansionary policy, explain what all 4…

A: In the United States, Fed is the central bank who performed Monetary policies to deal with business…

Q: Thinking about T-accounts for the Federal Reserve System: If a bank finds it is short of reserves by…

A: When talking about Federal Reserve's balance sheet, it can be seen that it records treasure security…

Q: From the IMF Working Paper about Global Financial Crisis briefly explain one of the alternatives:

A: IMG working papers on various topics helps to get a clear understanding about the economic problems.

Q: describe the actions the Federal Reserve took to maintain a healthy economy during the recent…

A: Fed has done so much to prevent the economy from slowing down during the economic crises as an…

Q: What is the meaning of bail-in and bail-out?  What are the pros and cons of using bail-in to resolve…

A: Bail-in and bail-out are terms used in the context of resolving financial crises, mainly related to…

Q: Discuss the motives of holding money to liquidity preference theory. according

A: Liquidity preference theory, proposed by John Maynard Keynes, makes sense of the interest for cash…

Q: Explain how each of the following helps to stabilize the financial system: deposit insurance,…

A: The financial system consists of the monetary instrument's web, mismanagement might lead to crises…

Q: Explain any four instruments that the central bank can use to regulate the financial system?

A: Central bank is said to be a financial institution that has the authority to control money supply of…

Q: “The only way that the Fed can affect the level of borrowed reserves is by adjusting the discount…

A: The Fed can change or alter the discount rate in order to encourage or discourage banks to borrow…

Q: If the Fed wants to increase the money supply it will buy bonds. True False

A: Bonds are units of corporate securities that are securitized as tradeable assets and issued by…

Q: Why is credit so important to our economy? Can the economy function without credit

A: Banks acquire from resident and rent it out as credit to assembling which is the principal job of…

Q: Can fiscal policy and/or conventional monetary policy solve the liquidity trap problem?

A: The liquidity trap refers to a situation in which conventional monetary policy becomes ineffective…

Q: Please explain thoroughly with example (if possible).  What are the effects of Basel III on the…

A: Basel III norms introduced in 2010 mainly focused on the tier 1 capital requirements of banks .

Q: Explain the modern monetary policy instruments (Quantitative Easing, Credit Easing, Interest Rate…

A: Monetary Policy Instruments are those which affects the economic stability by altering the money…

Financial Institutions and Federal Bank

The word financial institution is a kind of business organization that deals with the financial activities of a nation. These activities include accepting deposits, making payments, granting loans and advances, transferring funds, holding shares, providing credits, purchasing and selling foreign exchanges, investments in shares, futures commodities, and many more.