According to the <em>"Not Too Big Enough" </em>article, some of the <em>sources of </em><em>scale economies</em><em> in the banking and finance industry</em> are as follows:
1. Bigger banks can spread their investment (fixed) costs over more output, thereby <em>reducing the </em><em>cost per unit </em><em>and making it impossible for </em><em>smaller banks </em><em>to compete in the market</em>. Most often, the smaller banks cannot afford investments in modern banking computing power and systems management.
2. Bigger banks can <em>consolidate banking functions</em> with the <em>elimination of redundancies </em>after each merger and acquisition. The cost of redundancies also gives them economies of scale.
3. Bigger banks have access to <em>larger pools of </em>deposits and will not engage in borrowing at higher costs. Smaller banks cannot tow this line because of their small scale, lacking the required funding mix.
4. Finally, advertising works best where a bank has a large geographic spread. The cost of advertising over a large area is worth it, unlike when a small bank markets its services by advertising.
2. These economies of scale mean that Oligopolies are increasing on Wall Street, and there will be further consolidations of smaller banks. Of course, every small bank would like to engage in mergers and acquisitions to grab a share of the scale economies.
Thus, <em>as banks grow large</em>, they should be mindful that enjoying the scale economies comes with the risk of crumbling like the banks regarded as <em>"too big to fail" </em>when they build on a pack of cards.
Learn more: brainly.com/question/3156270
Answer: i don’t remember this that well but i think u have to add the two numbers
Explanation:
Answer:
a letter issued by a bank to another bank to serve as a guarantee for payments made to a specified person under specified conditions.
Explanation:
A portfolio of stocks may achieve diversification benefits if the stocks that comprise such portfolio are not perfectly positively correlated.
A stock portfolio is a collection of stocks that are invested in with the hope of making a profit. By putting together a diverse portfolio that spans various sectors individual will be able to become a more resilient investor.
This is because if one sector takes a hit, the investments held by you in other sectors aren’t necessarily affected.
When assembling a stock portfolio, it’s important to have the organizational goals in mind beforehand. That way the decision-making process is guided by reason as opposed to emotion.
To know more about stock portfolio here:
brainly.com/question/13463364
#SPJ4
Answer:
The correct answer is b. an implied contract.
Explanation:
The theory of implicit contracts refers to the fact that the relationship between employers and workers is governed, in addition to the "explicit" legal contracts signed between the two, by a multitude of tacit commitments established during the understanding between the two parties. Implied contracts are unwritten agreements and informal rules that companies have with their workers, and that, in many cases, are justified in the commitment to wage stability. In this theory, companies set wages within a broad and long-term strategy or stability of the employment relationship.
