FIN 366 Financial Institutions Week 2 Complete

| March 23, 2015

FIN 366 Week 2

week 2 DQ. 1

Please answer one of the following questions.

  1. Explain why the banking system was so unstable prior to establishment of the Fed in 1914.
  2. What is a “call loan” and how did call loans contribute to economic recessions?
  3. Explain why the Board of Governors of the Federal Reserve System is considered so powerful. What are its major powers and which is the most important?
  4. Explain the concepts of frictional unemployment, structural unemployment, and the natural rate of unemployment. How do these affect what is considered full employment?
  5. Why are bank failures considered to have a greater impact upon the economy than other types of business failures? Do you agree with this conclusion?
  6. What are the major lessons that have been learned from past bank failures? Do you think that history can or will repeat itself?
  7. What is the purpose of bank examinations? How do they differ from that of a CPA audit?

FIN 366 Week 2 DQ. 2

Please answer one of the following questions.

  1. Explain why the FOMC is the key policy group within the Fed.
  2. A bank has $3,000 in reserves, $9,000 in bank loans, and $12,000 of deposits. If the reserve requirement is 20% what is the bank’s reserve position? What is the maximum dollar amount of loans the bank could make? What would happen to the nation’s money supply if the Fed lowered the reserve requirement to 10 percent? Demonstrate your results with numerical examples and T-accounts.
  3. Explain how the Fed changes the money supply with an open market purchase of Treasury securities.
  4. What are some of the potential conflicts between goals of monetary policy? Explain.
  5. Bank regulation is considered to be in the public interest. Thus, the more regulation the better. Explain why you agree or disagree with this statement.
  6. How do failing bank resolution policies differ between large and small banks? Why the difference?
  7. How can an effective lender of last resort prevent financial panics from developing? Why was the Fed unable to prevent the great depression of the 1930’s?

 

FIN 366 Week 2 Individual Assignment The Role of Financial Institutions in Financial Markets Paper (800+ Words)

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