Questions from Financial Markets

Q: What is a credit spread? Why do credit spreads rise during

What is a credit spread? Why do credit spreads rise during financial crises?

Q: Why is the originate-to-distribute business model subject to

Why is the originate-to-distribute business model subject to the principal–agent problem?

Q: Why are more resources not devoted to adequate, prudential supervision of

Why are more resources not devoted to adequate, prudential supervision of the financial system to limit excessive risk taking, when it is clear that this supervision is needed to prevent financial cri...

Q: How can a sovereign debt crisis make an economic contraction more likely

How can a sovereign debt crisis make an economic contraction more likely?

Q: Why do bank panics worsen asymmetric information problems in credit markets?

Why do bank panics worsen asymmetric information problems in credit markets?

Q: Compare the structure and independence of the Federal Reserve System and the

Compare the structure and independence of the Federal Reserve System and the European System of Central Banks.

Q: In the 1960s and 1970s, the Federal Reserve System lost member

In the 1960s and 1970s, the Federal Reserve System lost member banks at a rapid rate. How can the theory of bureaucratic behavior explain the Fed’s campaign for legislation to require all commercial b...

Q: How can the adverse selection problem explain why you are more likely

How can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger?

Q: “The independence of the Fed has meant that it takes the

“The independence of the Fed has meant that it takes the long view and not the short view.” Is this statement true, false, or uncertain? Explain your answer.

Q: The Fed promotes secrecy by not releasing the minutes of the FOMC

The Fed promotes secrecy by not releasing the minutes of the FOMC meetings to Congress or the public immediately. Discuss the pros and cons of this policy.