GF500 Unit 5

Unit 5 – Assignment 1

• Unit 5 – Assignment 1

  ·
  Chapter Seventeen:

  · Question
  2

  Bank
  Sources of Funds What are four major sources of funds for banks? What
  alternatives does a bank have if it needs temporary funds? What is the most
  common reason that banks issue bonds?

  · Question 5

  Federal Funds Define federal funds, federal funds market, and
  federal funds rate. Who sets the federal funds rate? Why is the federal funds
  market more active on Wednesday?

  · Question 10

  Bank Use of Funds Why do banks invest in securities even
  though loans typically generate a higher return? Explain how a bank decides the
  appropriate percentage of funds that should be allocated to each type of asset.

  · Question 13

  Credit Crisis Explain how some mortgage operations by some
  commercial banks (along with other financial institutions) played a major role
  in instigating the credit crisis.

  ·
  Chapter Eighteen:

  · Question 5

  Glass-Steagall Act Briefly describe the Glass- Steagall Act.
  Then explain how the related regulations have changed.

  · Question 7

  CAMELS Ratings Explain how the CAMELS ratings are used.

  · Question 13

  Economies
  of Scale How do economies of scale in banking relate to the issue of interstate
  banking?

  · Question 16

  16. Financial Services
  Modernization Act Describe the Financial Services Modernization Act of 1999.
  Explain how it affected commercial bank operations and changed the competitive
  landscape among financial institutions.

  · Question 18

  18. Conversion of Securities
  Firms to BHCs Explain how the conversion of a securities firm to a bank hold-
  ing company (BHC) structure might reduce its risk.