massign9 - Money and Banking N. Sheflin ASSIGNMENT 9 NOTES:...

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Money and Banking N. Sheflin ASSIGNMENT 9 NOTES : Banking basics, along with some good stories. DUE **WEDS** 3/23 Also, Investment Game – Round 3 Mutual Funds. READING Croushore 8 And from Wikipedia: http://en.wikipedia.org/wiki/Banking_in_the_United_States and http://en.wikipedia.org/wiki/Bank Look at: http://en.wikipedia.org/wiki/Off-balance-sheet and Take a peek at http://www.fdic.gov/regulations/safety/manual/section3-8.html KEY POINTS Banks and Asymmetric Information-moral hazard and adverse selection o The Lemons’ problem and the need for financial intermediaries o Banks’ roles Banking crises o S&L Crisis (Wikipedia) ± The savings and loan crisis of the 1980s and 1990s (commonly referred to as the ) was the failure of 747 savings and loan associations (S&Ls aka thrifts ). A Savings and Loan is a financial institution in the United States that accepts savings deposits and makes mortgage, car and other personal loans to individual members. ± The ultimate cost of the crisis is estimated to have totaled around $ 160.1 billion, about $124.6 billion of which was directly paid for by the US government—that is, the US taxpayer, either directly or through charges on their savings and loan accounts [1] —which contributed to the large budget deficits of the early 1990s. ± The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990–1991 economic recession . Between 1986 and 1991, the number of new homes constructed per year dropped from 1.8 million to 1 million, which was at the time the lowest rate since World War II . [2] (Wikipedia) o 1990’s Credit crunch o Financial Crisis 2007-09 Commercial Bank Balance Sheet o Sources and uses of funds o Off balance sheet items Bank production process o Asset transformation o Provision of services o ROA and ROE and A/E
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This note was uploaded on 10/11/2011 for the course ECON 336 taught by Professor Hassan during the Spring '08 term at Rutgers.

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massign9 - Money and Banking N. Sheflin ASSIGNMENT 9 NOTES:...

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