Financial Markets Exam 2

Yes, partially, by the end they were only trading for 1/2 face value

A second type of "Greenback" paper money was referred to as "United States Notes" and were issued from 1862 to 1865. Were these notes backed by gold? What happened to their value by the end of the war?

Redeemable in gold coin

After the National Banking Act of 1864 some National Banks in California issued a paper currency called Yellowbacks while National Banks in the rest of the Northern states issued Greenbacks backed by Treasury Bonds. Why were they called Yellowbacks?

90%

After the stock market crash of 1929 how much of the value of the stock market had been lost by 1932?

B, C, D, G, J

Alexander Hamilton argued in favor of which of the following (more than one may be true)? a) state government control of banking, the granting of bank charters b) federal government control of banking and the granting of bank charters c) weak State governments d) a Central Bank and nationwide system of nationally chartered banks e) a weak central (Federal) government f) strong state governments (States rights of self determination) g) a loose interpretation of the Constitution h) a strict interpretation of the Constitution i) no Central Bank and no national bank charters (licenses to do business) j) a strong Federal government

Increase M by 3% and Increase Q by 3%

Assuming the monetarist view of the relationship between money supply growth and inflation is correct, what should a central bank do over the long term if they desire to achieve a 0% inflation target?

C

Between 1913 and 1920 what happened to consumer prices once the Fed's was in control of the money supply? a) Prices remained stable b) Prices decreased c) Prices doubled, resulting in consumers losing ½ of their money's buying power

C

Which of the following are true about the paper money issued by the Continental Congress? a) The Continental Bank Notes issued in 1775 were backed by gold and silver. b) All of the coins issued during this time were pure silver. c) The bank notes were backed only by the promise to redeem the notes with silver coins in the future. d) They were sometimes called Greenbacks. e) None of the above is true.

The FOMC has the power to direct all open market operations of the Federal Reserve banks. Consists of BOG & 5 reps from Federal Reserve Banks

What is the FOMC? Who are the typical voting members of the FOMC?

CPI-U: Consumer Price Index for urban consumers Core CPI-U: CPI-U minus food & energy

What is the difference between the CPI-U measure of inflation and the "Core CPI-U" measure?

Sum of Money in circulation & Reserve Balances

What is the monetary base? What are its two main components?

the average number of times the money supply turns over in a year

What is the velocity of money? What is the assumption explaining how velocity behaves over the long term?

FOMC ( Federal Open Market Committee)

What part of the Federal Reserve created monetary policy directives?

placed ceilings on interest rates

What was Regulation Q? How did it contribute to disintermediation?

attempt the reset the price of the gold standard higher, but it failed in less than 2 years

What was the Smithsonian Agreement? What did it attempt to do? How long did it last?

20.67

What was the official gold price after the Specie Payment Resumption Act of 1875? What was the relationship between the free market price of gold and the official price of gold after it was fully implemented?

B

What was the official gold price in US dollars from 1834-1933? a) $19.39 per ounce b) $20.67 per ounce c) $35.00 per ounce d) $38.00 per ounce e) $44.00 per ounce

1. Increased fiscal policy spending and tax cuts resulted in rising deficits. 2. Rising deficits resulted in more government borrowing 3. More government borrowing resulted in the need for the Fed to keep interest rates low 4. The Fed attempted to keep rates low by increasing the money supply and monetizing the new debt 5. Increasing money supply resulted in rising inflation 6. Rising inflation led to rising nominal interest rates (Fisher equation) 7. Go back to step 4 8. Continue cycling through steps 4 to 7 until you create a rising inflation environment

What was the relationship between a monetary policy that expanded the money supply to try to keep interest rates low, a fiscal policy that increased government spending for social welfare programs, infrastructure spending, and defense, tax cuts, and inflation in the 1960's?

Gold, from surge of gold in banks from gold rush

What were the Yellowback notes backed by? Explain how the Yellowback Monetary System emerged.

Deep recession

What were the results of Paul Volcker's policies at the Federal Reserve?

Dual banking system. State v National Banks. Fed membership

What were the two general goals of the DID-MCA (1980)?

C, F , J

When the Federal Reserve was first created, it was supposed to do which of the following? a) Issue pure fiat money b) Issue paper money backed by Treasury Bonds c) Issue Federal Reserve Notes in order to provide a flexible money supply d) Issue continental dollars e) Act as a lender of last resort to the US Treasury f) Act as a lender of last resort to member banks g) Maintain a check clearing system to speed the clearing of payments between banks h) Regulate all national banks i) Hold National Bank reserves j) Regulate bank reserve requirements

2010 as a result of the financial reform act

When was the Consumer Financial Protection Bureau (CFPB) created and why?

1913

When was the Federal Reserve Act passed?

suspended the convertibility of the $ in gold

When we say "Nixon closed the gold window" what do we mean? What does that act have to do with the evolution of the US $ into a pure fiat currency?

Atlanta

Which FRB provides services to banks and other depository institutions that operate in the State of Florida?

New York

Which federal reserve bank is considered the "lead bank"?

E

Which of the following activities are carried out by the FRB's? a) clearing checks and payments b) replacing old currency c) providing loans to depository institutions that are in need of funds d) both a and b are correct e) answers a, b, and c are all correct

Suspend Redemption of Bills

"Greenback" paper money issued to finance the early years of the Civil War in 1861 was referred to as "Demand Notes" because, originally, they could be redeemed for gold. What did the government do in December of 1861 and in the following year?

A, B, C, E, H, I, L, M , N , O

. A Keynesian economic policy approach has which of the following characteristics? a) A focus on Fiscal Policy b) Monetary policy accommodates fiscal policy c) Developed during Great Depression (1930's) d) Popularized and supported by Milton Friedman e) Developed during a period of high unemployment f) Developed during a period of low unemployment g) Developed during a period of high inflation h) Developed during a period of no inflation and/or deflation i) Developed during a period of slack industrial capacity j) Developed during a period of strong economic growth k) A heavy reliance on the Fisher equation to adjust nominal interest rates for inflationary expectations l) Since there are no inflationary expectations an increase money supply results in lower nominal interest rates m) In a recession, there is a focus on using fiscal policy to stimulate demand in the economy n) Government spending increases to encourage economic growth o) If government is short of money, then the central bank can expand money supply

B

. In 1834 Congress changed official price of gold to ___? a) $19.39 per ounce b) $20.67 per ounce c) $35.00 per ounce d) $38.00 per ounce e) $44.00 per ounce

27% change in M + (-25%) change in V = % Change in P + 2% Change in P equals 0% Inflation

. The velocity of the M2 money supply has fallen from over 2.0 in 2008 to under 1.5 today representing a decrease of over 25% since the financial crisis began. Using the equation of exchange explain how this might be responsible for a very low inflation rate despite a large increase in the monetary base engineered by the Federal Reserve as a response to the crisis.

D

. Which of the following price indices would report a relatively lower inflation rate? a) CPI-U b) C-CPI-U c) PCE d) Core PCE

D

.In the first few years of the Great Depression, the Hoover Administration did which of the following? a) Organized a government bailout of the financial industry b) Organized a bailout of the transportation (railroad) industry c) Implemented his "New Deal" set of programs. d) Both a and b are correct e) All answers, a, b, and c are correct

B, E, H

19. Which of the following were characteristics of the "Free Banking Era" during 1837-1863 (more than one may be true)? a) Only national banks existed. b) State banking authorities regulated reserve requirements and the money supply. c) The Federal Reserve regulated reserve requirements the money supply. d) Both national banks and state banks existed. e) Only state chartered banks existed. f) The US Treasury issues paper money backed by gold. g) National banks issued gold coins, silver coins, and paper money backed by gold. h) Wildcat banks issued paper money that had no gold or silver backing and, as a result, these bank notes rapidly lost their value. i) State banks issued gold coins, silver coins, and paper money backed by gold.

0% Inflation

Consider the Equation of Exchange in its form that shows changes in the variables over time. If we assume velocity is constant over the long term and the long-term average rate of growth in the real economy that is sustainable is around 3%, what is the implication for the relationship between the growth in the money supply and changes in the average price level in the economy?

The role of monetary policy under a Keynesian orientation is to provide a low interest rate environment through money creation in order to minimize the cost of government borrowing that is used to finance the fiscal policy spending programs and to encourage borrowing by businesses and individuals

Describe the role of monetary policy under the New Deal. (25 words or less)

Devalued the dollar by 40.94%

Describe what Executive Order 6102 (April 5, 1933) and Executive Order 6260 (August 23, 1933) did. What did FDR do on January 31, 1934 and what was the impact on the paper dollar wealth of American citizens?

Raised by 14%

During WW II the Federal Reserve's monetary policy was focused on keeping interest rates low to help the government finance the war with low interest Treasury Bonds. What was the impact on the CPI in 1947?

restored gold standard

Explain how the Specie Payment Resumption Act of 1875 solved the inflation problem of the "Greenback" United States Notes that were issued by National Banks during the Civil War.

foolish investors overextended on margin buys and amplified their losses extensively

Explain how the practice of buying stock on margin contributed to the market crash.

Dynamic: implemented to raise or lower the level of funds Defensive: offset the impact of other conditions that affect the level of funds

Explain the difference between dynamic and defensive open market operations.

fear of attack by local politicians of bankers

Explain why the Federal Reserve was created as a system of 12 regional FRB's rather than a single central bank.

B, D, H, J, K, L ,M

Franklin D. Roosevelt (FDR) was elected President and took office in 1933. Which of the following is a true statement about this President (more than one may be true)? a) In terms of economic theory, you would consider him a Monetarist. b) In terms of economic theory, you would consider him a Keynesian. c) In terms of economic theory, you would consider him an Austrian. d) His focus was on fiscal policy stimulus of the economy. e) He was concerned with controlling inflation. f) Today, he would be a member of the Tea Party. g) He argued for less regulation of the financial industry h) He essentially outlawed individual or corporate ownership of gold i) He forced everyone to sell their gold to the Federal Reserve at market prices. j) He forced everyone to sell their gold to the Federal Reserve at $20.67 per ounce. k) He outlawed the export of gold or gold money out of the US. l) He raised the official gold price from $20.67 per ounce to $35.00 per ounce. m) He was responsible for a 40.94% devaluation of the paper dollar in terms of gold. n) He issued Executive Order 6102 on April 5, 1933 that put the US on a gold standard.

?

How did rising interest rates contribute to declining Federal Reserve members during the 1970's?

To maintain the pegged rate, the Fed was forced to give up control of the size of its portfolio as well as the money stock. (slide 13 - history notes part 5). So the Fed expanded the money supply to keep rates low.

How did the Fed keep interest rates low?

12

How many federal reserve districts and regional Federal Reserve Banks (FRB's) are there?

1. Low interest rates tend to stimulate borrowing from the banking system. (Note: low interest rates are often used to counter the effects of a recession) 2.This expansion of credit causes an expansion of the supply of money, through the money creation process in a fractional reserve banking system. 3.This in turn leads to an unsustainable "credit-fuelled boom" during which the "artificially stimulated" borrowing seeks out diminishing investment opportunities. 4.This boom results in widespread malinvestments, causing capital resources to be misallocated into areas which would not attract investment if the money supply remained 5.Austrian economists argue that a correction or "credit crunch" -commonly called arecessionor bust -occurs when credit creation cannot be sustained. 6.They claim that the money supply suddenly and sharply contracts when markets finally clear, causing resources to be reallocated back toward more efficient uses (and safer investments).

Identify the 5 stages of the Austrian Business Cycle Theory. Note that the first stage, characterized by low interest rates, is often a response to a recession, depression, or some type of financial crisis.

Sold A, Bout the B-E

In 1971 the Bretton Woods agreement collapsed. Which of the following assets did global investors buy? Which did they sell? a) the US $ b) gold c) the Japanese Yen d) the Swiss Franc e) the German Deutschmark

resulted in reporting lower inflation rates

In 1999 the BLS modified their formula for calculating the CPI numbers and began using a "geometric mean" formula. What impact did this change in the calculation have on reported inflation numbers?

A

In the 1960's the Federal Reserve (and the U.S. Treasury) had to intervene in gold markets to try to maintain the official $35 per ounce gold price mandated by the Bretton Woods agreement. How did they do this? a) By buying gold on global markets and shifting the supply curve to the right. b) By selling gold on global markets and shifting the supply curve to the right. c) By buying gold on global markets and shifting the supply curve to the left. d) By selling gold on global markets and shifting the supply curve to the left

B

In the 1960's the Federal Reserve (and the U.S. Treasury) had to intervene in gold markets to try to maintain the official $35 per ounce gold price mandated by the Bretton Woodsagreement. How did they do this? a) By buying gold on global markets b) Buy selling gold on global markets c) By buying gold on domestic markets d) Buy selling gold on domestic markets e) Buy changing the official price of gold

raised them

In the late 1920's both the economy and the stock market were "overheated" and the stock market had evolved into a "bubble". What did the Federal Reserve do in 1929 with respect to interest rates?

A

In today's political environment, you would associate which political viewpoints with the views of Thomas Jefferson? a) Republicans and libertarians b) Democrats

A

Now the Coinage Act of 1792 was a response, in part, to the inflation of the Continental dollar. This act first set the gold price at _____. a) $19.39 per ounce b) $20.67 per ounce c) $35.00 per ounce d) $38.00 per ounce e) $44.00 per ounce

C

The Banker's Panic of 1907 was caused by which of the following? a) A failed Federal Reserve monetary policy. b) A war. c) A failed attempt by Wall Street stock traders to corner the market in the stock of the United Copper Company. d) Excessive government regulation.

A, B, E, F, G, H, I, J

The Coinage Act of 1792 did which of the following (more than one may be true)? a) Created the United States dollar as the country's standard unit of money b) Set the official gold price at $19.39 per ounce c) Set the official gold price at $20.67 per ounce d) Set the official gold price at $35.00 per ounce e) Established the U.S. Mint f) Pegged the value of the newly created U.S. dollar to the Spanish silver dollar. g) Authorized the issue of coins made from copper, silver, and gold h) Allowed individual citizens to take gold and silver to the mint and have those metals melted down and struck into coins i) The value of a dollar was defined in terms of both a certain amount of gold and a certain amount of silver. j) Established a bimetallic system of money.

A

The Coinage Act of 1857 repealed prior legal tender laws concerning foreign specie and ended the use of foreign coins as legal tender (only U.S. coins were allowed). a) True b) False

People began to think farm prices could never fall. As an article in a publication called The Cultivator said in 1836: "Who ever heard of a man buying and selling a farm at the same or a lessened price? It is so well understood that the seller is to have more than he gave, that it has almost become a settled principle in the purchase of real estate." The bubble burst with the Panic of 1837, and was followed by the first great depression in United States history, from 1837 to 1843. http://www.nytimes.com/2011/02/06/business/06view.html HEY! WAIT A MINUTE. THAT SOUNDS A LOT LIKE THE FINANCIAL CRISIS OF 2008 BUT IN 2002 - 2007 IT WAS LENDING FOR SPECULATING IN THE RESIDENTIAL HOUSING MARKET.

The Second Bank of the United States was known for excessive lending to speculate in agricultural farmland. What was the impact of these activities?

A, C, E

The coinage Act of 1834 did which of the following (more than one may be true)? a) Raised the price of gold relative to silver. b) Raised the price of silver relative to gold. c) Supported the argument for a money that was backed by only gold rather than a money backed by both gold and silver. d) Supported bimetallism rather than monometalism. e) Weakened the Second Bank of the United States by lowering the value of their paper notes that were backed by silver. f) Weakened the Second Bank of the United States by lowering the value of their paper notes that were backed by gold.

A, E, H, I

The decade of the 1970's was known for which of the following (more than one may be true)? a) Overall, the 1970's was a period of stagflation. b) Overall, the 1970's was a period of strong economic growth and stable prices. c) Stable oil prices d) Rising gold prices e) Increasing inflation f) Decreasing nominal interest rates g) A rising value of the US $ on foreign exchange markets h) Rising government spending i) Multiple deep recessions

B, D

The decade of the 1980's was known for which of the following (more than one may be true)? a) Overall, the 1980's was a period of stagflation b) Slowing inflation c) Rising inflation d) Decreasing nominal interest rates e) The Savings & Loan Crisis that was (partially) caused by deregulation

New York district bank

The president of which FRB always sits on the FOMC?

?

The stock market crash signaled the beginning of the Great Depression. According to Milton Friedman, what happened to the money supply during the Great Depression?

A, D, E, G, H

Thomas Jefferson argued in favor of which of the following (more than one may be true)? a) a weak central (Federal) government b) federal government control of banking and the granting of bank charters c) weak State governments d) strong state governments (States rights of self determination) e) state government control of banking, the granting of bank charters f) a loose interpretation of the Constitution g) a strict interpretation of the Constitution h) no Central Bank and no national bank charters (licenses to do business) i) a strong Federal government j) a Central Bank and nationwide system of nationally chartered banks

Consumer Price Index for Urban Consumers

What is the CPI-U?

Reveals relationship between money supply & Inflation MV=PQ Money Supply x Velocity of Money = Price Level x Real GDP

What is the Equation of Exchange? What are the 4 variables in the equation? What do both sides of the equation represent? How do the two sides of the equation differ from each other?

All but C, F, H

Under Presidents John F. Kennedy and Lyndon Johnson (1960-1968) which of the following occurred? a) Spending on social programs was expanded. b) Spending on infrastructure projects was expanded. c) Income taxes were raised to pay for the spending programs and to pay down the national debt remaining from WW II. d) Income taxes were cut to encourage borrowing and spending in order to encourage economic growth. e) There was a dramatic increase in defense spending. f) The Fed was encouraged to keep money supply growth slow and interest rates high to fight inflation. g) The Fed was encouraged to keep money supply growing fast enough to maintain a low interest rate environment to help finance the government spending. h) Higher taxes and controlled spending resulted in decreasing annual budget deficits and slower growth in the national debt. i) Lower taxes and increased spending resulted in increasing annual budget deficits and faster growth in the national debt. j) Increasing deficits and more government borrowing resulted in "easy" monetary policies that monetized the new debt k) As the money supply increased, inflation increased and the value of the $ fell relative to gold as indicated by the increasing free market price of gold

$35

Under the Bretton Woods Agreement what was the official gold price?

E

Under the Bretton Woods agreement which of the following statements was true? a) The U.S. dollar was convertible into gold at the U.S. Treasury by private citizens. b) The U.S. dollar was convertible into gold at the U.S. Treasury by foreign central banks. c) Gold clauses were allowed in government contracts. d) All currencies of countries belonging to the Bretton Woods agreement were pegged to gold and convertible into gold. e) All currencies of countries belonging to the Bretton Woods agreement were pegged to the U.S. dollar at fixed exchange rates outlined in the Bretton Woods agreement.

-5% change in M + 0% Change in V = % change in P + -5% change in Q

Using the equation of exchange, explain how a decrease in the money supply during a depression could result in deflation.

bad investments

What are "malinvestments" and how do they fit into the Austrian view?

Permanent Income Tax

What did the 16th Amendment to the Constitution do?

Set the gold standard as only currency, no more silver bimetallism

What did the Gold Standard Act of 1900 do? What does it have to do with bimetallism?

a lender to those institutions that cannot obtain credit elsewhere and the collapse of which would have serious implications for the economy.

What do we mean by the statement that the Fed is a "Lender of Last Resort"?

As the government's bank or fiscal agent, the Fed processes a variety of financial transactions involving trillions of dollars. Just as an individual might keep an account at a bank, the U.S. Treasury keeps a checking account with the Federal Reserve, through which incoming federal tax deposits and outgoing government payments are handled. As part of this service relationship, the Fed sells and redeems U.S. government securities such as savings bonds and Treasury bills, notes and bonds. It also issues the nation's coin and paper currency.

What do we mean by the statement that the Fed is the "fiscal agent for the U.S. Government"?

The Federal Reserve plays an important role in the U.S. payments system. The twelve Federal Reserve Banks provide banking services to depository institutions and to the federal government. For depository institutions, they maintain accounts and provide various payment services, including collecting checks, electronically transferring funds, and distributing and receiving currency and coin. For the federal government, the Reserve Banks act as fiscal agents, paying Treasury checks; processing electronic payments; and issuing, transferring, and redeeming U.S. government securities

What do we mean when we say that the Fed "manages a payment clearing system"?

D

What happened after inflation destroyed the value of the continental dollar? a) It was immediately replaced with another fiat currency that was widely accepted. b) Many people switched to using foreign paper money that had an intrinsic value. c) Many people switched to using silver Spanish milled dollars that had no intrinsic value. d) Many people switched to using silver Spanish milled dollar coins that had an intrinsic value.

Paul Volcker allowed interest rates to try to meet equilibrium

What happened in October of 1979 at the Federal Reserve that changed the trajectory of rising inflation? (Who was it and what did he do?)

rapidly grew upwards

What happened to the free market price of gold after Nixon closed the gold window?

C

What happened to the paper Continental Bank Notes issued in 1775 to finance the Revolutionary War? a)They were redeemed for gold and silver coins b)They were redeemed at full face value for government bonds c)They lost almost all their value within 5 years of issue d)They were redeemed for Federal Reserve Notes e)None of the above

Sum of currency held by the public & transactions deposits

What is M1? What are its two main components?

?

What is a "gold clause" in a U.S. Government contract?

Slow economic growth occurring simultaneously with rising inflation rates

What is stagflation?

Bureau of Labor and Statistics

What is the BLS?

7 board members that sit on the Federal Open Market Committee (FOMC)

What is the Board of Governors (BoG)? How many people usually sit on the BoG?

A, B , C, F

Which of the following is true (more than one may be true)? a) Rural states in the Midwest and South supported the Thomas Jefferson view b) Northeastern seaboard states with large cities supported the Alexander Hamilton view c) Farmers generally supported the Thomas Jefferson view d) Farmers generally supported the Alexander Hamilton view e) Bankers and Industrialist supported the Thomas Jefferson view f) Bankers and Industrialist supported the Alexander Hamilton view

B, D, F

Which of the following is true about the First Bank of the United States (1791-1811) (more than one may be true)? a) The bank only served the government - it did not undertake any private business activities. b) The bank issued paper money backed by gold and silver. c) The paper money it issued was backed by government bonds. d) The bank was forbidden to buy government bonds (to lend money to the government). e) The bank had a lot of support in the rural states and territories in the south f) There was strong opposition from other private banks outside of northeastern cities

B, C , E, H, I , J

Which of the following is true about the National Currency Act (1863) / National Banking Act (1864). (more than one may be true)? a) It was passed by a majority of all states (both southern and northern states) b) It established the Federal Reserve c) It established Office of the Comptroller of the Currency d) Created a Dual Banking System where banks could be either Investment Banks or Commercial Banks e) Created a Dual Banking System where banks could be either State Banks or National Banks f) Allowed national bank notes (paper money) issued by National Banks g) All paper money issued by National Banks had to be backed by gold or silver h) All paper money issued by National Banks had to be backed by Treasury Bonds i) Taxed state bank notes 10% to drive them out of existence j) It created Federal Government monopoly control of the money supply through control of the National Bank system

ALL

Which of the following is true of the Second Bank of the United States (1816-1836) (more than one may be true)? a) It acted as fiscal agent for the Federal Government. b) It issued paper notes backed by gold, silver, and bank notes from State banks. c) It was created to help the Government raise funds to pay off War of 1812 debt. d) Excessive money creation and lending for speculation in land created our nation's first "boom, bubble, crash, financial panic" cycle. e) President Andrew Jackson feared control of a powerful central bank by wealthy financiers and vetoed a bill to renew the bank's charter.

D

Which of the following is true of the Treasury Accord of 1951? a) In the years following WW II president Harry Truman argued for a monetary policy that focused on keeping interest rates low. b) In the years following WW II president Harry Truman argued for a monetary policy that focused on fighting inflation. c) The Treasury-Fed Accord eliminated the obligation of the Fed to monetize the debt of the Treasury at a fixed interest rate. d) The Treasury-Fed Accord increased the independence of the Fed. e) The Treasury-Fed Accord decreased the independence of the Fed.

CPI-U, C-CPI-U, CPI-W

Which price indices do the Federal Reserve target?

C

Which type of economist would argue that easy credit policies of the Federal Reserve in the 1920's led to an unsustainable credit boom in asset prices that inevitably led to a market bubble and the eventual bursting of that bubble, resulting in the Great Depression? a) Keynesian economists. b) Monetarist economists. c) Austrian economists.

B

Which type of economist would argue that the Great Depression started as an ordinary recession but that Federal Reserve mistakes resulting in a shrinking money supply and made the recession turn into a Great Depression? a) Keynesian economists. b) Monetarist economists. c) Austrian economists.

A

Which type of economist would argue that the Great Depression was caused by a widespread loss of confidence that resulted in under consumption and under investment? a) Keynesian economists. b) Monetarist economists. c) Austrian economists.

The Fed

Who owns the federal reserve banks?

Milton Friedman

Who said ""inflation is always and everywhere a monetary phenomenon? What does that mean?

employees guilty of secretly opening unauthorized accounts for customers as a result of bonus incentives

Why did the CFPB fine Wells Fargo bank $100 million?

many banks invested their deposits into the market, when market crashed, no money to give back to customers

Why did the stock market crash cause banks to fail? Explain.