Many observers believe that the largely unregulated nature of global banking activity leaves the world financial system vulnerable to bank failure on a massive scale. Is this a real threat? If so, what measures have governments taken to reduce it?
What will be an ideal response?
Yes, this is a real threat. A high level of inter-bank depositing implies that problems affecting a single could be highly contagious and could spread quickly to banks with which it is thought to do business. In response to this threat, the Basel Committee was created in 1974 to coordinate the surveillance and regulation among bank regulators from different countries.
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The euro is said to be selling at a ________ if the spot dollar price is $1.18 and the nine-month forward rate is $1.16
A) forward discount B) forward premium C) forward spread D) none of the above
An index based on a mail survey of 5,000 households by the Conference Board that measures households' perceptions of general business conditions, available jobs in the households' local area, and expected personal family income in the coming six
months is called the: A) Consumer Sentiment Index. B) Consumer Confidence Index. C) Consumer Satisfaction Index. D) Consumer Consumption Index.