Use the links/articles below to answer the below find the answers using the links/ articles below use the links/articles to find the answer any questions below using the links/ articles 

Answer question 1,2,3,4 below read the article to answer the questions and get your answers from the articles
Please read the following articles and answer the questions below:

 

First Article: https://www.wsj.com/articles/flying-blind-into-a-credit-storm-widespread-deferrals-mean-banks-cant-tell-whos-creditworthy-11593423001

 

Second Article: https://www.wsj.com/articles/banks-to-companies-no-more-deposits-please-11623238200#

 

Third Article: https://www.wsj.com/articles/banks-borrow-unsecured-cash-at-record-clip-while-deposits-flee-11675561093#

 

Please read the following articles and answer the questions below:

 

1. The first WSJ article, written in the first half of 2020, talks about US banks tightening lending standards, reducing personal loan and credit card approval rates, and in some cases, re-evaluating what proper lending criteria are. What precipitated these adjustments? Of two informational problems discussed in Chapter 9, which one are US banks struggling with and why? Book: Money, Banking, and the Financial System Glenn Hubbard; Anthony Patrick O'Brien Chapter 9: Transactions Costs, Asymmetric Information, and the Structure of the Financial System

 

 

 

2. The second WSJ article describes the banking system awash with deposits. What was the level of deposits US banks as of May 2021? What was the main source of deposits flowing into the banks?

 

3. What are the drawbacks of too much deposits in the current environment? What kind of strategies have banks employed to offset these drawbacks?

 

4. The third WSJ article paints a completely different picture of bank deposits in 2022 when the US banks faced the fastest decline in deposits on record. By how much did total deposits fall in the second and third quarter of 2022? How are the banks dealing with massive deposit outflows? (Side note: as we will see later and discuss in the next two chapters, ballooning deposits and subsequent outflows precipitated failure of several midsize banks in Spring of 2023, namely, Silicon Valley Bank)

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1 The adjustments in lending standards by US banks in the first half of 2020 were precipitated by wi... View the full answer