what is ADVANTAGES AND DISADVANTAGES OF THIS MORATORIUM FOR THE BANKS AND BORROWERS? provide EXAMPLES.

Q: What is the status of a lender on collateral if they fail to perfect their security interest? What…

A: A security interest in an asset that cannot be claimed by any other party is called a perfected…

Q: What are the major risks faced by financial institutions?

A: MAJOR RISKS FACED BY FINANCIAL INSTITUTIONS ARE : 1. INTEREST RATE RISK  2. CREDIT RISK 3. LIQUIDITY…

Q: What are some moral hazard issues with structured finance?

A: Introduction : Moral hazard is an economic term used to describe a situation in which one party in a…

Q: What are the main sources of funding for commercial banks?

A: Banks are a financial institution that receives money from customers and makes a loan to the…

Q: Explain the possible IFRS treatment of bank loans.

A: IFRS is international finance reporting standards will replace with Accounting standards 39.

Q: Why do federally guaranteed loans usually have the least risk for banks, List some popular…

A: Federal guaranteed loans are loans that are backed by the federal government, which means that the…

Q: What is the difference between Investment Banks and regular Banks? explain one small paragraph.

A: Introduction: Investment banks are those banks that are specialize in providing institutional bodies…

Q: What are the two best arguments against debt reduction (i.e., the cons)?

A: The term "debt reduction" is also known as debt settlement. As the name suggests, it…

Q: What are the possible arguments for setting up a firewall between investment banks and commercial…

A: At the time, improper banking activity–the overzealous commercial bank involvement in stock market…

Q: f a bank's credit ratings decrease, How does this affect borrowers, lenders, and financial…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Why do you think banks are willing to offer savers higher rates of return if they agree to less…

A: Savers are those persons who deposit money in various deposit accounts for the purpose of earning…

Q: Provide an example of Decentralised Finance (Defi) and critically examine the effect of Defi on…

A: Decentralised Finance (DeFi), which challenges conventional banking structures and ushers in a new…

Q: How banks can improve their return on equity and what are its negative externalities.

A: RoE is ubiquitous in banks, serving as both an indicator of overall performance and a means of…

Q: Define the Credit Risk and include in your discussion examples of the Credit Risk and why Financial…

A: A large number of financial transactions take place in the financial system and each transaction…

Q: Are there any advantages to the equity-holders of banks from them engaging in short-term as opposed…

A: Equity holders enjoy the return from two sources i.e. from the company's end in the form of a…

Q: Why are the banks reluctant to lend, and what should be done to increase bank lending?

A: Banks generally borrow and lend cash in the interbank loaning market so as to oversee the liquidity…

Q: Related to ethics and contracts, why do payday loans appear to be an ethical issue?

A: Payday loans are small ticket loans for a short duration. The borrower pays back the loan when he…

Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.