Fluctuations in Banks' Market Share and Government Regulations Quiz

Banks have shifted from offering traditional services to becoming general financial-service providers.

Investment banking, insurance protection, financial planning, advice for merging companies, risk-management services

Money-center banks cover whole regions, nations, and continents, offer a wide menu of financial services, and face global competition. Community banks are smaller, serve local communities, offer personalized services, and have a narrower range of financial services.

A bank is any business offering deposits subject to withdrawal on demand and making loans of a commercial or business nature.

Covering whole regions, nations, and continents, offering a wide menu of financial services, acquiring smaller businesses.

Serving local communities and towns, offering personalized services, having a narrower range of financial services.

The legal basis for banking is the establishment of financial holding companies.

Money-center banks primarily focus on international financing and large-scale corporate lending.

Community banks serve local communities with traditional banking services, while money-center banks focus on international finance and large corporations.

Banks' closest competitors include security firms, credit unions, finance companies, and insurance companies, which offer services like lending, investment, and insurance.

Globalization has led to the global expansion of bank operations and the reduction of geographical barriers.

Convergence involves businesses expanding across industry lines to diversify their product offerings and broaden their sales base.

a. Speculation and market collapse in real estate and mortgage markets. b. Innovation and invention of financial instruments. c. Weak monitoring, failure to control financial institutions. d. Failure of many commercial and investment banks especially in the US and Europe.

Deregulation in the late 20th century lifted interest rate ceiling on deposits and loans, while reregulation post the 2007-2009 economic collapse restricted taking on new services and focused more on tracking systematic risk.

There is an increasing interest-sensitive mix of funds due to better educated and more interest-sensitive customers, requiring banks to be more competitive in the returns they offer and more sensitive to changing public preferences.

Electronic systems replacing labor-based production systems, virtual banking, and major technologies like ATMs, cell phones, point of sale, and credit cards.

The collapse of the economy during 2007-2009 led to a tightening of government control on banks to restrict taking on new services and focus more on dangers and tracking systematic risk.

The evolution towards technological change and automation made banks more capital-intensive, fixed-cost, and less labor-intensive, transforming the industry's operational dynamics.