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Commerce · Q304

Banking and Financial Institutions

Graduate and Post Graduate · Commerce · question 304

Q304

How does shadow banking differ from commercial banking? 1. While commercial banks are tightly regulated, shadow banking is not well regulated. 2. Shadow banking cannot create money. 3. While liabilities of commercial banks are insured, shadow banking liabilities are not insured. 4. While commercial banks access to central bank liquidity in the times of distress, shadow banking does not have such resource. Select the correct answer:

A.
1 only
B.
1 and 2 only
C.
2, 3 and 4 only
D.
1, 2, 3, and 4
Answer

Answer: Option D

Solution

Answer: Option D
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