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The Fall of the American Banking System

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listen to radio recording in the link provided below & pick 1 of them and explain it to me in your own words 1-2 pages, I am not looking for you to repeat back to me what you heard or read in the recording what I am looking for is the understanding of these very complex issues and for you to explain it to me as if you are my teacher what happened in each of these sectors of the economy. ***Each paper should be written and explained in your own words please.

3. Bad bank

http://www.thisamericanlife.org/radio-archives/episode/375/bad-bank

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Solution Summary

The gaps in the US banking system are explained in a structured manner in this response. The answer includes references used.

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My understanding of Bad Bank is that there are poor banking practices that led to the fall of the banking system in the US. Bad Bank begins when a bank gives a loan of $100 to a customer who promises him an annual interest of 6%. This interest rate is higher than the market rate but the borrower agrees to the higher rate because he does not have documents to support his claim of income. When the customer is not able to pay either the interest or the principal, the bank wants to sell off the house and ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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