Explain how bank regulators seem to face a bit of a paradox regarding preventing monopoly power by banks and spurring competition.
What will be an ideal response?
One of the goals of banking regulators is to prevent any bank from growing so large that it effectively becomes a monopoly in its geographic market. Monopolies are inefficient and are seldom of benefit to consumers. On the other hand, while we usually think of competition as being beneficial to consumers because it results in low prices and new products, within the financial industry competition can cause banks to seek other ways to earn profits, which may expose the bank to greater risk, and threaten the integrity of not just one institution but the entire system.
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In a Mexican factory, each worker can produce 1/8 of a vase or 1/16 of a statue per hour. If there are 400 workers at the factory, the maximum number of vases that could be produced in one hour is
a. 400 b. 25 c. 50 d. 100 e. 80
Compared to our trade deficit with Japan from 2002-2009, our deficit with China was
A. much larger. B. slightly larger. C. slightly smaller. D. much smaller.