Concerns continue to be raised as to the impact on the banking sector when interest rates return to a situation where they are not supported by Central Bank and Government intervention. You are to critically examine under what circumstances future governments should step into save to save the banking and financial institutions from collapse. In this essay consider the roles and functions of the banking sector within an economy, and discuss the implications of failure. In your answer you should give relevant examples.
This assignment gives you the opportunity to examine in detail the arguments for and against the various responses and conclude as to what YOU think should be future response.
You are advised to consider the implications of failing to support the financial institutions and allowing them to collapse, AND the implications of moral hazard if there is confidence of government support.
