THE ECONOMICS OF MONEY,BANKING, AND FINANCIAL MARKETS 319

CHAPTER 11 *6 Explain how sovereign loans in the 1970s and early 1980s caused problems for the Big Six Banking Industry: Structure and Competition 287 11 What are the essential differences between chartered banks, trust and mortgage loan companies, and credit unions and caisses populaires? Explain how the early development of chartered banks in Canada differed from the development of commercial banks in the United States *12 Why have banks been losing cost advantages in acquiring funds in recent years? *8 What incentives Canadian regulatory agencies have to encourage the establishment of foreign banks in Canada? 13 If inflation had not risen in the 1960s and 1970s, the banking industry might be healthier today Is this statement true, false, or uncertain? Explain your answer Explain how securitization can be used to change illiquid assets into liquid assets *14 Why have banks been losing income advantages on their assets in recent years? *10 If the bank at which you keep your chequing account is owned by Saudi Arabians, should you worry that your deposits are less safe than if Canadians owned the bank? 15 The invention of the computer is the major factor behind the decline of the banking industry Is this statement true, false, or uncertain? Explain your answer WEB EXERCISES Go to the Canadian Bankers Association website at www.cba.ca and search for an article called Automated Banking Machine Market in Canada Write a short essay on ABM transactions in Canada and bank access points According to the trends, does the public appear to have more or less access to banking facilities? Despite the regulations that protect banks from failure, some fail Go to www2.fdic.gov/hsob/ Select the tab labelled Failures and Assistance Transactions How many bank failures occurred in the U.S during the most recent complete calendar year? What were the total assets held by the banks that failed? How many U.S banks failed in 1937? Be sure to visit the MyEconLab website at www.myeconlab.com.This online homework and tutorial system puts you in control of your own learning with study and practice tools directly correlated to this chapter content On the MyEconLab website you will find the following mini-case for this chapter: Mini-Case 11.1:The Changing Landscape for Domestic and Global Financial Markets