Question 1

The advantages banks have over alternatives to banks are...&#10;A)anxiety people have about the safety of their liquid wealth and hence their need to deposit it in a bank.&#10;B)public trust.&#10;C)government safety nets that ensure depositor protection.&#10;D)all of the above

Accepted Answer

All three choices are advantages banks have over alternatives. People often deposit their money in banks because they feel it is safer than keeping it on hand or with other institutions. Banks also benefit from public trust, which is built over time through regulation and reputation. Finally, government safety nets such as the FDIC in the United States provide added protection for depositors, increasing confidence in the stability of the banking system overall.

Question 2

The initiatives and developments that are profoundly affecting the financial services landscape are: pick all the right answers)&#10;A)payments system innovations&#10;B)Bitcoin&#10;C)global violence and unrest&#10;D)online platforms and disaggregation&#10;E)P-2-P lending

Accepted Answer

A, B, D, E AND G.

Question 3

The explosion in the public regulation of financial institutions and markets has been due to...

Accepted Answer

Growth in global systemic risk, social and political agendas, growing complexity of the financial sector, and regulatory arbitrage.

Question 4

The share of the financial sector in the total GDP of the economy during 1980-2010 has...&#10;A)remained roughly constant.&#10;B)increased.&#10;C)decreased.&#10;D)displayed considerable volatility around a flat line.

Accepted Answer

The share of the financial sector in the total GDP of the economy has increased during 1980-2010. This period saw significant financialization of the economy, with growth in financial services, products, and markets contributing more to GDP.

Question 5

Financial services are...&#10;A)incidental to the operation of the &#34;real&#34; economy.&#10;B)all that matter to the &#34;real&#34; economy.&#10;C)the lubricant that helps the &#34;real&#34; economy function effectively and grow.&#10;D)none of the above&#10;E)b and c

Accepted Answer

Financial services act as the lubricant for the real economy, facilitating transactions, providing credit, and enabling growth and efficiency. They are not merely incidental, nor are they all that matters, but they play a crucial role in supporting economic activities.

Question 6

Global systemic risk has been elevated by:&#10;A)increasing integration and interconnectedness of financial institutions and markets within countries and across national boundaries.&#10;B)growing connectedness of shadow banks with other parts of the financial system.&#10;C)increased regulatory costs that have spurred financial innovation and growth of shadow banking.&#10;D)all of the above&#10;E)none of the above

Accepted Answer

All of the options (A, B, and C) contribute to the elevation of global systemic risk. Increased integration and interconnectedness of financial institutions and markets make them more vulnerable to the contagion effect of shocks. The growing connectedness of shadow banks with other parts of the financial system also increases the potential for risks to spread. Meanwhile, increased regulatory costs have led to financial innovation and the growth of shadow banking, which has created new risks that regulators may not fully understand or be able to control.

Question 7

The main drivers of change in the financial services industry will be ___________.

Accepted Answer

The answer of The main drivers of change in the...

Deck 18: The Future