33:390:430 Study Guide - Midterm Guide: Financial Stability Board, Inequality Of Bargaining Power, Bank Reserves
10 Oct 2018
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Buying/selling treasuries: setting minimum capital levels (capital:at-risk asset ratio; tiered capital, ensure proper investment policies & diversification. Can place impairment of capital restrictions: deposit insurance (guarantee) by government moral hazard, monitoring/surveilling banks. 2: the legal/regulatory environment of treasury management: monitoring & managing overall safety & soundness of banking system. Protect borrowers and depositors from bank failure: setting/implementing monetary policy. Actions that the fed can take to implement the monetary policy: determining guidelines for chartering banks & other depository fi"s. Chartering: establishing/opening up banks or other depository fi"s: allocating credit toward sectors of economy & protect consumers. Countries force mandates to support sectors by certain loan amts or limits to int rates, fees, etc. Regulations protect vulnerable consumers who lack bargaining power: protect investors purchasing securities through fi"s. ; protect investors from abuses (insider trading, fraud, etc. ) Central banks: implements/manages monetary policy (ex: the fed, ecb, bank of england) Monetary policy: interest rates, bank reserves, issuing govt. services.
