How did the financial crisis of 2007 and 2008 affect the financial services industry?
What will be an ideal response?
The recent financial crisis further contributed to consolidation among banks and in other firms in the financial services industry. Also, in response to the financial crisis, regulations and legislation have been enacted or are being considered to provide better safeguards for the financial system and address the moral hazard of “too big to fail.”
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According to the Taylor rule, which of the following will lead to the largest increase in the nominal federal funds rate?
A) a two percentage point increase in the target inflation rate B) a one percentage point decrease in the target inflation rate C) a one percentage point increase in output D) a two percentage point decrease in output E) a one percentage point increase in the inflation rate
Who does inflation benefit?
(a) All businesses (b) The government (c) Individuals living on fixed incomes (d) Debtors
The largest source of federal government revenue is
a. corporate income taxes b. individual income taxes c. payroll taxes d. sales and excise taxes e. tariffs on imported goods and other customs fees and duties
If the Federal Reserve sells a $2,000 bond to a bond dealer who pays with a check written on an account at Second National Bank, what changes will occur on the bank's balance sheet after the check clears?
a. Reserves and total assets will increase by $2,000 . demand deposits and total liabilities will decrease by $2,000. b. Reserves, demand deposits, total assets, and total liabilities will all increase by $2,000. c. Reserves and total assets will decrease by $2,000 . demand deposits and total liabilities will increase by $2,000. d. Reserves, demand deposits, total assets, and total liabilities will all decrease by $2,000. e. Reserves will decrease by $2,000 . demand deposits, total assets, and total liabilities will all increase by $2,000.