Improve services to withstand foreign competition why

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Improve services to withstand foreign competition- why Thai banks are giving banks a face life. Previously may have been providing bare minimum but can no longer get away with that, this will be undesirable for domestic banks but will increase efficiency Huge incentive for small banks to become more efficient and get their shit together. Small banks could maybe for a partnership with another bank C. Read “Banking Mergers Opposed” (Item 7.3). Do you find it plausible that “funds are drained from local communities by interstate banks”? How would small local bank behave before consolidation? How would big interstate bank behave after? Would more funds flow out after? Consolidation has a positive effect on consumers and the economy because the improved efficiency. Small local banks would charge higher rates because of previous geographic advantages, where big interstate banks would come in and challenge these rates and make them competitive in turn making smaller banks improve their efficiency. Lower rates charges by big banks will help community Small banks would set up a correspondent relationship outside of the town. They will charge a higher rate than a bank that has consolidated because it is smaller (taken advantage of less of economies of scale) and it can act like a monopoly. Big interstate banks will charge a lower rate because they have taken advantage of economies of scale. It is now a competitive market and the national bank will lend more which will result in more funds because it went from a monopoly to a competitive market More funds would flow after consolidation because the large bank could try and diversify its risks by making more loans in this local community. Cheaper loans mean more people can take out loans.
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D. Read “Bank free or die” (Item 7.7) and “Fact Check: Have Small Banks Struggled Under Dodd-Frank? (Item 7.8) and answer the following questions: i. Why is the number of small banks decreasing? Is it failures? Less small banks are being created (because low interest rates after the financial crisis) have made it unprofitable to set up a new bank. Dodd Frank has imposed costly regulatory paper work on small banks It’s not failure, it’s a slowdown of new banks entering the market on top of banks consolidating with one another. ii. How might increasing regulation—especially Dodd-Frank—have contributed? Do you see evidence in the data? Increased fixed cost/ invisible cost In 2015, the Government Accountability Office (GAO) found that bankers “cited an increase in compliance burden associated with [Dodd-Frank] rules. This included increases in staff, training and time allocation.” A 2014 survey by the Independent Community Bankers Association (ICBA) determined that over the prior 10 years, the annual cost to complete regulatory paperwork increased for 86 percent of banks surveyed. Total hours to complete the paperwork went up by 73 percent over the same period.
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