Question
1) Explain the main objective of a commercial bank with respect to net spread and leverage. 2) Explain and describe one change that occurred as
1) Explain the main objective of a commercial bank with respect to net spread and leverage.
2) Explain and describe one change that occurred as a result of the Financial Modernization Act of 1999 that altered the nature of commercial banking. Be sure to explain how this change affected the behavior of banks and any risks that were created as a result.
3) Describe the difference between the three major types of deposits that commercial banks take on: Demand Accounts, NOW Accounts and Negotiable Certificates of Deposit (CDs). How do each of these accounts affect lending at the commercial bank.
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