The rise of securities markets and the expansion of intermediation by nonbanks has come partly at the expense of commercial banks. Plot the ratio of bank credit (FRED code: TOTLL) to total credit market debt outstanding (FRED code: TCMDO) and comment on the trend.
Answer to relevant QuestionsDeflation raises the real burden of repaying fixed-rate debt. Japan has recently experienced a long deflation.a. Plot the percent change from a year ago of consumer prices in Japan (FRED code: JPNCPIALLQINMEI) and discuss ...Why do you think that U.S. banks are prohibited from holding equity as part of their own portfolios?If lines of credit and other off-balance sheet activities do not, by definition, appear on the bank’s balance sheet, how can they influence the level of liquidity risk to which the bank is exposed?Commercial banks have become increasingly involved in real estate market. Plot the percent change from a year ago of real estate loans made by commercial banks (FRED code: REALLN) and discuss the relationship between the ...Explain what the phrase “too-big-to-fail” means in reference to financial institutions. How did the policy responses to the financial crisis of 2007-2009 affect the “too-big-to-fail” problem?
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