ECON 3430 Final: Possible ECON Q&A notes

• School: York University
• Department: Economics
• Course: ECON 3430
• Professor: Brenda Spotton- Visano

Document Summary

***** canadian financial stability do current financial regulation make it. Elastic note = cad banks issue more notes in fall & redeemed in winter (agriculture, crops went to market in fall) Minister of finance speaks with large banks to takeover insolvent banks. Regulation because: consumer protection (expensive for ppl to collect info, small firms merging creates monopolies & they start overcharging) & financial system stability (prevent banks from being too big, stop1 them from having market power) Payment system collapses in one part could see a dominos affect. Derivatives (good: transfer risk to those who can bear it. Bad: can break largest institutions, difficult for regulators to detect) Long standing goal of regulators is to prevent banks from growing too big (their failure might threaten the financial system & banks with no competition exploit their customers) Also, greater the competition, harder it is for banks to make a profit (reduce prices for customers)