Risks for the macroeconomy

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Reference no: EM132047721

Most U.S. banks are privately owned, profit-making organizations. Although they provide a service just as many other businesses, banks differ because of their importance in the macroeconomy. Policymakers have debated whether banks should be permitted only to do banking business or whether banks should be permitted to engage in other lines of business such as selling insurance or buying and selling stocks and bonds.

If a bank fails, what are the risks for the macroeconomy that do not exist for other businesses?
If banks could participate in other lines of business what benefits would there be for consumers?
Overall, should banks be allowed to enter other lines of business?

Reference no: EM132047721

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