The size of a financial institution has an effect on the type of nondeposit funding source it considers.For example,larger depository institutions have the credit standing to sell the largest negotiable CDs,while the Fed funds market is suitable for smaller institutions.

Question

Quizplus · Accepted Answer

Larger institutions have a higher credit standing which allows them to sell larger negotiable CDs, while smaller institutions typically rely on the Fed funds market for nondeposit funding sources.

The Size of a Financial Institution Has an Effect on the Type