During its financial crisis of 2001, the Argentine government froze access to bank accounts for a year. Many banks subsequently went under, costing Argentine citizens their bank-based savings. The event was not a complete surprise. The Argentine government had a history of freezing bank accounts, such as during financial crises in 1982 and 1989. What affect, if any, do you think these freezes will have on the ability of Argentine banks to perform their financial intermediation functions in the future? Be sure to explain your answer.
During its financial crisis of 2001, the Argentine government froze access to bank accounts for a year. Many banks subsequently went under, costing Argentine citizens their bank-based savings. The event was not a complete surprise. The Argentine government had a history of freezing bank accounts, such as during financial crises in 1982 and 1989. What affect, if any, do you think these freezes will have on the ability of Argentine banks to perform their financial intermediation functions in the future? Be sure to explain your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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