Here's an article I read just now entitled "Socialist Football and Capitalist Soccer". Was I wrong?

Class note: We are covering Chapter 14 for the final, but not Chapter 15. The bank regulation material we discussed in class still counts for the final.

Explain the three ways that the banking industry was segmented in the years leading up to the Civil War. Why were state banks more likely to fail than free banks?

Why was the Bank of the United States considered to be controversial?

What is the dual banking system? Why does it persist?

Why does the United States have so many banks?

Which government regulations restrict bank competition? How did they come about? Are they likely to continue in the future?

What law discussed today in class restricted interstate banking? Is it still in force? (Explain.) What are the costs to geographic restrictions on bank competition? To savers? To borrowers? In a banking system with banks of different sizes, which banks stand to gain from geographic restrictions? To lose?

Evaluate the following statement. A banking system with deposit insurance needs more supervision from third-party examiners than does a banking system without guarantees for depositors.

Evaluate the following statement: The United States has about 8900 banks, whereas Canada has only a few, so the U.S. banking industry must be more competitive.

Define capture theory. Explain verbally and graphically why firms have incentives to lobby the government? How (and why) to regulators become "captured" according to this theory?

Explain, verbally and graphically, the difference between saving- and credit-induced growth.

Explain how fraud is contained by market forces when banking is conducted under a competitive gold standard.

How was the Bretton Woods system organized? Why did it fall apart?

Why are a bank's liabilities said to be its sources of funds? Why are a bank's assets said to be its uses of funds?

Why would government regulators and taxpayers like banks to have high net worth?

Describe three types of risk that banks face.

How do banks try to reduce credit risk?

What are floating rate loans? How do they help to reduce the interest rate risk for banks?

What are the major types of off-balance sheet activities in which banks engage? Why have banks been involved in more of these activities recently and less in traditional banking?

Suppose that banks collectively have not managed their exposure to interest rate risk well and that market interest rates increase and become more volatile. What do you predict will happen to the value of the equity capital in the banking industry? To the number of bank failures?

Suppose that Ann, who has an account at First Bank, writes a check for $1000 to Bill, who has an account at Melon Bank. When the check clears, how have the balance sheets of First and Melon been affected?

If you were a banker who believed that interest rates were going to rise, what would you try to do with your bank's portfolio?

Define: Return on Assets, Return on Equity, and Net Interest Margin? (Here are some examples. Here is a list of average annual return on assets since 1934.)

What are credit scores and how are they computed?

How is the PBGC financed? Define defined benefit and defined contribution. What does backloaded mean?

As an employee of a large firm, you are given the choice between a defined benefit pension plan and a defined contribution pension plan. What are the advantages and disadvantages of each?

What are depository institutions and how are they related to the Fed? How were they traditionally segmented, and how are the segmented today? What is Gramm-Leach-Bliley?

What types of depository institutions specialize in loans to consumers and homeowners? How are they different from commercial banks?

Is a compulsory government-sponsored Social Security retirement annuity system as subject to adverse selection as a private insurance company that offers individual annuity contracts? Explain.

What is a depression and how it different from a deflation? What is the neutrality assumption, and how is it illustrated in the two monetary fables discussed in class? What is the quantity theory of money?

Explain how new money works it way through the economy. Who benefits from inflation (if anyone)? What is inflation as a tax?