A financial innovation that developed as a result of banks avoidance of bank branching restrictions was
A)money market mutual funds.
B)commercial paper.
C)junk bonds.
D)bank holding companies.

Question

Quizplus · Accepted Answer

Bank holding companies were developed as a response to branching restrictions imposed by regulators in the U.S. These restrictions limited a bank's ability to establish branches in different states. To get around these limitations, banks created holding companies that could establish subsidiary banks in different states. This allowed banks to expand their geographic reach and offer services in more areas, without technically violating branching regulations.

A Financial Innovation That Developed as a Result of Banks