Financial innovation has widened the cost advantages that banks have in acquiring funds,helping to explain why bank profitability has soared in recent years.

Question

Quizplus · Accepted Answer

Financial innovation has actually narrowed the cost advantages that banks traditionally had in acquiring funds, as it has enabled non-bank competitors to offer similar financial services often at lower costs, thereby increasing competition and potentially impacting bank profitability.

Financial Innovation Has Widened the Cost Advantages That Banks Have