3. Consider two countries with the following characteristics. Country A has no restrictions on bank branching...

 

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3. Consider two countries with the following characteristics. Country A has no restrictions on bank branching and banks in Country A are permitted to offer investment and insurance products along with traditional banking services. In Country B, there are strict limits on branch banking and on the geographic spread of a bank's business. In addition, banks in Country B are not permitted to offer investment and insurance services. Briefly explain each of your choices for the following a) In which country do you think the banking system is more concentrated? b) In which country do you think the banking system is more competitive? c) in which country do you think, everything else equal, banking products are cheaper? 4. Discuss the regulations that are designed to reduce the moral hazard created by deposit insurance. 3. Consider two countries with the following characteristics. Country A has no restrictions on bank branching and banks in Country A are permitted to offer investment and insurance products along with traditional banking services. In Country B, there are strict limits on branch banking and on the geographic spread of a bank's business. In addition, banks in Country B are not permitted to offer investment and insurance services. Briefly explain each of your choices for the following a) In which country do you think the banking system is more concentrated? b) In which country do you think the banking system is more competitive? c) in which country do you think, everything else equal, banking products are cheaper? 4. Discuss the regulations that are designed to reduce the moral hazard created by deposit insurance.

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a The banking system is likely more concentrated in Country B Strict limits on branch banking and geographic spread combined with restrictions on the ... View the full answer