What long-term nondeposit funds sources do banks and some of their closest competitors draw upon today? How do these interest costs differ from those costs associated with most money market borrowings?
Answer to relevant QuestionsWhat is the available funds gap?Deep Valley Bank borrows $125 million overnight through a repurchase agreement (RP) collateralized by Treasury bills. The current RP rate is 2.50 percent. How much will the bank pay in interest cost due to this borrowing?Inspiration Savings Association is considering funding a package of new loans in the amount of $400 million. Inspiration has projected that it must raise $450 million in order to have $400 million available to make new ...What is convergence? Product-line diversification? Economies of scale and scope? Why might they be of considerable importance for banks and other financial-service firms?Measured by volume and percentage of total capital, what are the most important and least important forms of capital held by U.S.-insured banks? Why do you think this is so?
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