Chapter 11, Problem 13Q

To determine

Reason why banks have been losing income advantages on assets?

Concept Introduction:

In the United States, the importance of commercial banks as primary lenders of funds to non-financial borrowers has reduced dramatically. In l974, banks provided 35 percent of these funds; today they provide only around 22 percent. This has been accompanied by a decrease in the asset-side of balance sheet of banking companies, as compared to newer financial intermediaries like mutual funds, brokerage agencies.