Question 1. Financial institutions are subject to regulations to ensure that they do not take excessive risk and can safely facilitate the flow of funds through financial markets. Nevertheless, during the credit crisis, individuals were concerned about using financial institutions to facilitate their financial transactions. Why do you think the existing regulations were ineffective at ensuring a safe financial system?
Question 2. Should tax payers be asked to bailout out financial institutions that make decisions which do not pan out and place the institution in a position of insolvency? Why or why not?
Question 3. Does a large fiscal budget deficit result in higher interest rates? Support the position you take.
Question 4. Do you think that computer technology will cause financial intermediaries to become extinct? Why or why not?