Banks' asset portfolios include state and local government securities because

Question

Quizplus · Accepted Answer

Banks consider holding state and local government securities as a way to attract business from these government entities. Banks can use their ownership of these securities to establish relationships with government officials and potentially win future business from them. Additionally, these securities are considered relatively safe investments as they are backed by the taxing power of the state or local government issuer.

Banks' Asset Portfolios Include State and Local Government Securities Because