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North Bank issues $50,000 capital notes to West Bank (transaction A) and issues $20,000 shares to Mr Williams (transaction B), a rich retiree who
North Bank issues $50,000 capital notes to West Bank (transaction A) and issues $20,000 shares to Mr Williams (transaction B), a rich retiree who had received income on its past investments, income that he held in his transactional bank account in West Bank and used to buy the shares. North Bank makes a $870,000 loan to its depositor Bob the Builder, a construction firm that needs to renew its stock of trucks. (transaction C) c) Identify which part of the story is a case of channelling of funds in the financial system. Explain your answer in details. (3 marks)
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