Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Case 1 : Free Money: To regulate or not! All Joshua wanted to do was buy an iPhone 1 1 . Instead, he ended up
Case : Free Money: To regulate or not! All Joshua wanted to do was buy an iPhone Instead, he ended up with $ in debt and a personal loan with an annual interest of per cent. "I was crying," Joshua says of the moment he realised how high her interest rate was: Debt from highinterest instalment loans, a reasonably new product, is becoming increasingly common among young people with short credit histories. The Consumer Financial Protection Bureau ensures borrowers are not getting sucked into socalled debt traps by putting in place payday loan regulations that, among other things, require payday lenders to check that borrowers can afford to pay back their loans on time by verifying information like incomes,rent, and even student loan payments. Large banks, including JPMorgan Chase, and Bank of America, do not provide payday loans but enable borrowers to easily access money by making the preapproved loan available with highinterest rates. Joshua is passionate about his encounter and stated that "These large banks are TooBigtoFail" TBTF and therefore need to be transparent and held accountable for their actions. Questions: Provide a clear explanation of why regulation is needed to address the issues arising You must include the payday loan regulation implicitly declared in the Case marks How do we determine whether payday loan regulations are good or bad? You must justify your response. marks Clearly define regulatory arbitrage' and provide the example seen in the case by identifying and discussing the loopholes large banks took advantage of marks The Banking Act of did not make provision for the separation of two core activities of banks. What are these activities, and what was the name Act used to address the loopholes? marks If one of the large banks JPMorgan Chase, Bank of America fails, this Act would assist the bank supervisor in resolving the failed institutions and discuss two methods the regulator can use to resolve the failing banks marks What role can deposit insurance play? Be sure to include in your discussion; the thinking behind the decision to introduce deposit insurance marks The COVID pandemic is a health crisis but can potentially push the Caribbean's financial sector into a banking crisis. Explain how risk assessment can signal an impending financial crisis; name and explain one risk method and suggest how bank supervisors can best monitor the regulatory compliance of banks and nonbank institutions. marks Questions: What is the purpose of financial regulation Who are the prominent institutions regulating banks and nonbanking institutions? What is the DoddFrank Act? What is the purpose of the DoddFrank Act? Outline different approaches for measuring risk. What are the risks and benefits of regulating digital payments Identify regulatory challenges concerning risk Recommend a solution to create a more robust regulatory approach to address the risks and challenges of digital payment systems.
Case : Free Money: To regulate or not!
All Joshua wanted to do was buy an iPhone Instead, he ended up with $ in debt and a
personal loan with an annual interest of per cent. "I was crying," Joshua says of the
moment he realised how high her interest rate was:
Debt from highinterest instalment loans, a reasonably new product, is becoming increasingly
common among young people with short credit histories. The Consumer Financial Protection
Bureau ensures borrowers are not getting sucked into socalled debt traps by putting in place
payday loan regulations that, among other things, require payday lenders to check that borrowers
can afford to pay back their loans on time by verifying information like incomes,rent, and even
student loan payments. Large banks, including JPMorgan Chase, and Bank of America, do not
provide payday loans but enable borrowers to easily access money by making the preapproved
loan available with highinterest rates. Joshua is passionate about his encounter and stated that
"These large banks are TooBigtoFail" TBTF and therefore need to be transparent and held
accountable for their actions.
Questions:
Provide a clear explanation of why regulation is needed to address the issues
arising You must include the payday loan regulation implicitly declared in the
Case marks
How do we determine whether payday loan regulations are good or bad? You
must justify your response. marks
Clearly define regulatory arbitrage' and provide the example seen in the case by
identifying and discussing the loopholes large banks took advantage of marks
The Banking Act of did not make provision for the separation of two core
activities of banks. What are these activities, and what was the name Act used to
address the loopholes?
marks
If one of the large banks JPMorgan Chase, Bank of America fails, this Act
would assist the bank supervisor in resolving the failed institutions and discuss
two methods the regulator can use to resolve the failing banks marks
What role can deposit insurance play? Be sure to include in your discussion; the
thinking behind the decision to introduce deposit insurance
marks
The COVID pandemic is a health crisis but can potentially push the Caribbean's financial
sector into a banking crisis.
Explain how risk assessment can signal an impending financial crisis; name and
explain one risk method and suggest how bank supervisors can best monitor the
regulatory compliance of banks and nonbank institutions.
marks
Questions:
What is the purpose of financial regulation
Who are the prominent institutions regulating banks and nonbanking institutions?
What is the DoddFrank Act?
What is the purpose of the DoddFrank Act?
Outline different approaches for measuring risk.
What are the risks and benefits of regulating digital payments
Identify regulatory challenges concerning risk
Recommend a solution to create a more robust regulatory approach to address the risks
and challenges of digital payment systems.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started