Assignment:
Follow the attachment for the Econ Assignment HomeWork Pls read it and answer the question:
Question 1.Would eliminating or reducing deposit insurance would be a good idea? Explain your answer.
Question 2. Why has bank supervision moved away from a focus on capital requirements to a focus on risk management?
Question 3. Describe two regulations that are designed to reduce moral hazard behavior by banks. Will regulations of this type completely eliminate moral hazard problems?
Question 4. If insurance companies provided fire insurance without any restrictions, what adverse selection and moral hazard problems might result?
Question 5. How do disclosure requirements limit bank risk taking?
Question 6. Why do banks prefer to value assets by historical-cost while regulators prefer to value assets by mark-to-market?
Question 7. Compare the costs and benefits of a too-big-to-fail policy?
Question 8. Is more competition in financial markets a good idea? Would restrictions on competition be a better idea? Why or why not?
Question 9. What does "well capitalized" mean? How is it calculated?