A policymaker proposes eliminating the $250,000 FDIC deposit…
A policymaker proposes eliminating the $250,000 FDIC deposit insurance cap and insuring all deposits regardless of size. Using the Diamond-Dybvig framework and the course material, evaluate this proposal. (select all that apply)
Read DetailsA regulator compares Summit Trust and Harborview using Total…
A regulator compares Summit Trust and Harborview using Total Assets and concludes they are both healthy banks performing similar functions at different scales. Using the LC framework, what key insight does TA miss? (select all that apply)
Read DetailsHard information (quantitative, verifiable data like credit…
Hard information (quantitative, verifiable data like credit scores and audited financial statements) benefits from economies of scale because it can be processed cheaply across millions of loans by algorithms, while soft information (qualitative, subjective data like borrower character) has scale diseconomies because it is difficult to transmit across organizational layers.
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