The topic of banking and its role in the economy has been an interest of many students in this class due to the experiences during the 2008 recession. Many find this chapter enlightening as a way to better understand the economic history of 2008/2009. In addition to the questions above, consider the following questions:
- What is a financial intermediary? How does the use of financial intermediation benefit the economy?
- What types of accounts and investments do BANKS consider assets & liabilities?
- What does the term adverse selection mean? What role does this idea play in banking?