"The internationalization of banking has weakened national safeguards against banking collapse, but at the same time it has made the need for effective safeguards more urgent." Discuss
What will be an ideal response?
True. Students should elaborate on:
(1 ) No deposit insurance, in particular, inter-bank deposits are unprotected
(2 ) Absence of reserve requirements
(3 ) Bank examination more difficult to enforce
(4 ) Not clear which group of regulators has responsibility for monitoring a given bank's assets
(5 ) Not clear which central bank, if any, is responsible for providing Lender of Last Resort assistance.
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In the above table, the balance on the current account for Country X is ________ billion dollars
A) -35 B) -75 C) +75 D) -200
Theory in economics
a. involves some simplification of reality b. bears no relation to reality c. approaches reality in all its complexity d. involves so much distortion of reality that it is worthless e. focuses on the unique aspects of each situation