Question

which banking system would be more competitive : A banking system where 1,000 banks serve 1,000...

which banking system would be more competitive : A banking system where 1,000 banks serve 1,000 towns and each town is served by one bank, or a banking system in which 10 banks, each with 1,000 offices, serve 1,000 towns so that each town has 10 banks from which to choose? Why?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The banking system in which 10 banks, each with 1,000 offices serve 1000 towns so that each town has 10 banks to choose from is more competitive

Each town has 10 banks, fighting for the same population of the town will lead to more competition and banks will provide better services, lower charges because people always have an option to go to rest of the 9 banks

However in the other system where each town is served by only one bank, there is no competition within the town. People have to go to the same bank for all their banking needs. The bank will be relaxed and will put no extra effort to improve quality of services because of no competition

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose there are $1000 of reserves in the banking system. Assume that banks are required to...
Suppose there are $1000 of reserves in the banking system. Assume that banks are required to hold 5% of their deposits as required reserves. Assume further, that banks wish to hold zero excess reserves. a. What is the total amount of deposits in the banking system? b. If banks decided to hold reserves in excess of those required what would happen to the money multiplier and the money supply? Why? c. If households decided not to deposit all their money...
When describing the banking system, which of these would be a false statement about it? Group...
When describing the banking system, which of these would be a false statement about it? Group of answer choices a) Banks lend to investors by borrowing funds from households. b) When it comes to the flow of capital between households and investors, banks are the crucial link. c) Competition between the central bank and private banks causes interest rates to be limited.
1. Which of the following is an accurate description of a dual banking system? a. Government...
1. Which of the following is an accurate description of a dual banking system? a. Government protection from losses may occur if a bank becomes insolvent or fails. b. The government grants charters to banks. c. Government permission is needed to establish and operate a depository institution. d. There exists a system in which bank charters are granted by both the government and private licensing organizations. 2. Which of the following most accurately explains why the bank chartering system of...
The fractional reserve characteristic of the banking system allows banks to create money and also create...
The fractional reserve characteristic of the banking system allows banks to create money and also create wealth from bank deposits. Describe why this statement is or is not true. What direction of change in velocity could explain the price level increasing by a smaller percentage than the money supply? What would this change in velocity imply about the frequency with which money changes hands?
LAs you have read, and may agree, “the large number of banks in the commercial banking...
LAs you have read, and may agree, “the large number of banks in the commercial banking industry and the absence of a few dominant firms suggests that commercial banking is more competitive than other industries”. Yet many of us prefer the “Thrift Industry” selection. Why? Which institutions do you prefer and why? Are others in this class using different financial institutions than yourself affecting rates you receive? How did you decide on where you bank now, and why is it...
The fractional reserve characteristic of the banking system allows banks to create money from bank deposits....
The fractional reserve characteristic of the banking system allows banks to create money from bank deposits. Describe briefly why this statement is true using a hypothetical scenario that demonstrates such money creation.
Which of the following would be true for the banking system if there were no government?...
Which of the following would be true for the banking system if there were no government? regulation? A. Bank owners would bear all the risks of bank failures. B. The money supply would never fluctuate. C. Borrowers would bear all the risks of bank failures. D. The money supply would be determined by individual banks. The Federal Reserve influences the long-run real interest rate LOADING... through? ____________. A. adjustments to expected inflation. B. the? long-term federal funds rate. C. the?...
Central Banks System Suppose a banking system with the following balance sheet has no excess reserves....
Central Banks System Suppose a banking system with the following balance sheet has no excess reserves. Assume that banks will make loans in the full amount of any excess reserves that they acquire and will immediately be able to eliminate loans from their portfolio to cover inadequate reserves. Assets Liabilities (in Billions) (in Billions) Tota reserves $150 Transactions accounts $500 Securities $150 Loans $200 Total $500   Total $500 You are required to answer the following Questions: 1) What is the...
(1)Three of the top 10 banks in the world (ranked by assets) are currently U.S. banks:...
(1)Three of the top 10 banks in the world (ranked by assets) are currently U.S. banks: T or F? (2) In the United States, more than 50% of banks have less than $100 million in assets: T or F? (3) In 1980, there were 14,404 commercial banks in the United States, but now there are 5,116 in 2020: T or F? (4) The U.S. banking industry is highly concentrated compared with other industries in the United States or compared with...
1.) Small banks A. act more competitively than large banks. B. usually charge more on loans...
1.) Small banks A. act more competitively than large banks. B. usually charge more on loans relative to what is paid to depositors compared to large banks. C. are generally more efficient than large banks. D. are growing in number. 2.) Which of the following best describes the current banking system in the United States? A. The market is dominated by 10 large banks and there are very few small banks operating any more. B. There are more than 10,000...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT