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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 20
Use the following news clip to work Problem.
U.S. Bank Earnings Up 21% As Loan Losses Decline, FDIC Says
For the 12th straight quarter, U.S. bank profits increased. At $34.5 billion, they were 21 percent higher than a year earlier, and, according to the Federal Deposit Insurance Corporation (FDIC), balance sheets were less risky. FDIC Acting Chairman Martin Gruenberg said "Levels of troubled assets and troubled institutions remain high, but they are continuing to improve." The number of institutions on FDIC's list of banks deemed to be at greater risk of collapse fell for a fifth straight quarter. By August, 40 banks had failed in 2012. The FDIC's deposit insurance fund, which protects customer accounts up to $250,000 against bank failure, increased.
Explain how the pursuit of profits can sometimes lead to bank failures.
U.S. Bank Earnings Up 21% As Loan Losses Decline, FDIC Says
For the 12th straight quarter, U.S. bank profits increased. At $34.5 billion, they were 21 percent higher than a year earlier, and, according to the Federal Deposit Insurance Corporation (FDIC), balance sheets were less risky. FDIC Acting Chairman Martin Gruenberg said "Levels of troubled assets and troubled institutions remain high, but they are continuing to improve." The number of institutions on FDIC's list of banks deemed to be at greater risk of collapse fell for a fifth straight quarter. By August, 40 banks had failed in 2012. The FDIC's deposit insurance fund, which protects customer accounts up to $250,000 against bank failure, increased.
Explain how the pursuit of profits can sometimes lead to bank failures.
Explanation
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Verified
Bank profits and failure:
Bank earnsalm...
Macroeconomics 11th Edition by Michael Parkin
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