Regulating depository financial institutions

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A) Why banks hold Treasury bills and municipal bonds in their investment accounts. Why do they hold few corporate securities?

b) Why the U.S. public has not acceted the concept "The free market is the best regulator of business" for regulating depository financial institutions. (In other words, why is there much less opposition to bank regulations as compared to possible regulation of, say, the automobile industry or the fashion industry?)

c)Why is the common bond definition important to competing bankers? To credit unions? Does it have any relationship to the risks faced by credit unions? (Note that the issue of what is the common bond between the members of credit unions has recently been in the courts and Congress.)

 

Reference no: EM1362647

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