Question
The core of banking functions and success is their sources of funds. Describe in detail the various sources of bank funds (money), how they acquire
The core of banking functions and success is their sources of funds. Describe in detail the various sources of bank funds (money), how they acquire these funds and who provides the funds. Similarly discuss the alternative sources of funds if a bank finds itself short of cash. Lastly, discuss why a bank might issue a bond.
By most standards, Money Market accounts are a newer funding source for banks versus traditional savings and checking accounts. Discuss how Money Market accounts are different.
The Federal Reserve can be a shortterm source of funds. Discuss how a bank borrows from the Fed and why a bank would borrow from the Fed. Also discuss how the borrowing interest rate is established and include a description of what this rate (that is charged to banks) is called. Include a discussion about how to determine what that rate is today.
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