CoboCards App FAQ & Wünsche Feedback
Sprache: Deutsch Sprache
Kostenlos registrieren  Login

Zu dieser Karteikarte gibt es einen kompletten Satz an Karteikarten. Kostenlos!

Alle Oberthemen / Economics / History of Economics / Econ 2200 Exam 2
103
Explain the five perceived problems with the Dual banking system.

4) Susceptibility to panics & runs
The problem lay in "Country" banks and the call-loan market:

Call-loans are loans that can be called for repayment at any time

"Country" banks are world banks that held a lot of money in city banks.

The problem was that city banks loaned out "Country" banks' money at higher interest rates but city banks borrowed this money on call.  So if the "Country" bank experienced a run, it would call back the city banks' loans who would in turn call back loans it gave out.  Basically, the situation could domino easily.
Neuer Kommentar
Karteninfo:
Autor: savhighsmith
Oberthema: Economics
Thema: History of Economics
Schule / Uni: UGA
Ort: Athens
Veröffentlicht: 12.10.2010

Abbrechen
E-Mail

Passwort

Login    

Passwort vergessen?
Deutsch  English