Question

Write one paragraph that summarizes clearly why banks are important to the U.S. economy and how government actions can affect how banks operate.

Answer 1

Banks are vital to the U.S. economy for several reasons.  It is through banks where people can borrow money to invest in a business that would help generate income and employment and this leads to improvement of the U.S. economy.  They enable business to spend more than their limit and give liquidity requirements when the need for it arises.  They also help individuals and business indirectly participate in global markets as well as promote entrepreneurship and help develop the economy.

The U.S. government affects how banks do business through regulations and policies.  One example is the Economic Recovery Act of 2008 that reinforced the American economy and helps avert the foreclosure of homes through development programs and debt counseling.