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Question 1 Banks a. Explain the process of bank lending via money creation. b. Discuss the following assertion, noting whether you agree or not and
Question 1 Banks a. Explain the process of bank lending via money creation. b. Discuss the following assertion, noting whether you agree or not and why: The Central Bank is in control of the quantity of money in an economy". (50%) Question 2 Financial system a. Explain the difference (if any) between banks and financial intermediaries. b. Define the measure of bank stability known as the z-score. Explain the logic behind this measure. C. Explain the process of securitization of bank loans. (50%)
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