https://www.youtube.com/watch?v=u8nNHuoBrkU Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu. Week 2: After reading Chapters 8 - 14, consider the following questions for discussion topic. Market Share versus Profits in Banking Economists representing the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency have gathered for meeting discuss a formal response to concerns that top managers at some of the nation's largest banks have expressed in a joint memorandum issued by the banks to all three regulators. The bank officials are concerned about the on-going shrinkage of bank assets as a share of total assets of financial institutions in the United States. In the late 1990s, assets of commercial banks as a percentage of total assets of U.S. financial institutions fell below mutual funds' share of total financial institution assets. If current trends continue, the share of total financial assets in pension funds also will bypass banks' share of total assets sometime before 2010. The bankers admit that they earned relatively high net interest margins and returns on equity and assets during the 1990s even as these market share trends were in progress. They also admit that their fee income and trading profits earned from derivatives and other off-balance-sheet activities have increased significantly in recent years. Nevertheless, the bankers are getting nervous. Isn't it time, they ask in the memorandum, for bank regulators to start pushing Congress to ease up on their regulatory burden and to toughen the rules for other financial institutions so that banks will have a better chance of pushing back up their institutions' share of total assets among all financial institutions? How should the Fed, FDIC, OCC economists respond to this argument? -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- It is required that you make your first post by Thursday. Your total participation throughout the week should consist of AT LEAST 500 words, spread over AT LEAST 3 posts made on three different days. Do not attach your posts. Be sure to respond to follow-up questions that seek clarification from classmates and instructor. Remember to include a word count at the end of each post. The purpose of this exercise is to demonstrate your understanding of the material. Full credit will be awarded for comments that are substantive and original. -------------------------------------------------------------------------------- Now click on the Money Talk text link at the top of the page to be taken to the discussion board. You can create a new threat by clicking on Create Thread at the top of the discussion board. You can also reply to a post by clicking on Respond at the bottom of that post