Banking Industry: Structure and Competition - Financial innovation and growth of shadow banking system - Avoidance of existing regulations
5 important questions on Banking Industry: Structure and Competition - Financial innovation and growth of shadow banking system - Avoidance of existing regulations
What did government regulation on the financial industry lead to?
What happened on the liability side of the 1970s?
receive interest on deposits
What happened to the banks in the late 70s when they began to pay interest to obtain funds?
other financial institutions
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What happened on the asset side?
Firms were able to acquire funds trough the financial market and didn't rely on banks to the same extent, how did the bank respond?
consolidated.
To survive banks attempted to maintain their traditional lending activity by expanding to new and riskier areas of lending
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