When To Bail Out

Essay specific features

 

Issue:

Business

 

Written by:

Mark R

 

Date added:

December 27, 2013

 

Level:

University

 

Grade:

A

 

No of pages / words:

2 / 396

 

Was viewed:

4880 times

 

Rating of current essay:

 
Essay content:

Even flourishing capital markets have not undermined the importance of commercial banking. Commercial banks are a widely used tool to stimulate the economy through loans that stimulate consumption and investment. Therefore, in essence the health of the banking sector is directly related to the health of an economy...
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A mismatch of time to maturity of advances and deposits can create severe problems. For instance, a wave of panic-stricken withdrawals can essentially bankrupt a bank in no time. This can trigger systematic risk and leave the entire economy shaken. The banks need to monitor their asset liability management statistics because any mismanagement can lead to bank runs or cash shortages...
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