1. Discuss what is traditional banking and how "borrowing short and lending long" makes a commercial bank susceptible to Bank Runs.

2. List 3 examples of Assets and 3 examples of Liabilities that commercial banks have on their balance sheets.

3. Briefly discuss 3 ways that banks can protect themselves or fight against "credit risk".

Answer rating: 100% (QA)

Traditional Banking and Borrowing Short and Lending Long Traditional banking refers to the core activities of commercial banks which involve accepting deposits from customers and providing loans and c... View the full answer