What do the terms core deposits and volatile, or noncore, deposits mean? Explain how a bank might estimate the magnitude of each.
Answer to relevant QuestionsExplain how each of the following will affect a bank’s deposit balances at the Federal Reserve: a. The bank ships excess vault cash to the Federal Reserve. b. The bank buys U. S. government securities in the open market. ...What are trusts preferred securities? What role did they play in the recent financial crisis? What are the consequences of a bank mistakenly pricing loans based on the historical cost of funds? Do they differ in a rising rate environment versus a falling rate environment? A corporate customer borrows $ 150,000 against the firm’s credit line at a local bank. Indicate with a T- account how the transaction will affect the bank’s deposit balances held at the Federal Reserve when the firm ...Some analysts believe that the new Basel III minimum capital requirements are excessive and will reduce bank profitability, ceteris paribus. Summarize these arguments.
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