Why aren't greater resources given to prudential regulation of the financial sector because it is obviously necessary to avert financial crises?

Q: List and discuss the various reasons that contributed to the financial crisis that occurred in 2008.

A: The main reason behind the financial crisis of 2008 is due to the burst of the housing bubble. Too…

Q: Describe the difference between financial markets and financial intermediaries? How can your funds…

A: Monetary business sectors and Financial go-betweens are two channels through which the monetary…

Q: Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial…

A: In a market, there are different industries and different types of markets for different types of…

Q: How does the “too big to fail” increase moral hazard? Can you cite an example from the 2007- 2009…

A: A financial crisis is when financial instruments and resources decline altogether in esteem.

Q: Why do banks choose to securitise their assets? Explain how securitisation may exacerbate the…

A: Answer -      Securities :- These are a financial instrument which has non-negotiable and has…

Q: a) How do financial institutions benefit the overall economy? b) How do Fls reduce monitoring costs…

A: Financial institutions bridge the gap between savers and investors. A healthy economy would have a…

Q: Do you think that the Fed should have bailed out large financial institutions during the credit…

A: The global financial crisis of 2008 was the largest crisis the world has weathered since the great…

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: With reference to South Africa, discuss the impact of the derivative market on financial sector…

A: Derivative Market:A derivative market is a financial market where derivative instruments are bought…

Q: Explain potential conflict of interest in the operational structure of systematically important…

A: In the mentioned question we have been asked what are the conflicts of interest in operational…

Q: Why does "adverse selection" exists in the case when a bank makes loans to individuals? Why does…

A: In economics the moral hazard and adverse selection refers to describe situations where one party is…

Q: Which of the following scenarios would result in a decrease in a bank's capital ratio? Check all…

A: The capital ratio of a bank is the percentage of a bank's capital to its risk-weighted assets. A…

Q: How do changes in interest rates impact the lending behavior of financial institutions?

A: Interest rates represent the cost of borrowing or the return on savings. They play a crucial role in…

Q: Explain why the existence of financial institutions can allocate financial resources better!

A: Good financial sectors mean banks and financial institutions have a major role to play in the health…

Q: Please explain the four main functions of the financial system.

A: The financial system is a network of institutions, markets, regulations, and laws that facilitates…

Q: Q1. The importance of studying financial markets and financial institutions for the citizens.…

A: The primary function of the financial market is to facilitate the movement of funds from savers to…

Q: Why some economists worry that there could be "moral hazard" risk after US government bailed out…

A: In economics the moral hazard refers to a situation where in one party engages in risky behavior…