Financial Markets and Institutions (2-downloads)

stimulate a search by financial institutions for innovations that are likely

to be profitable.

Starting in the 1960s, individuals and financial institutions operating in finan-

cial markets were confronted with drastic changes in the economic environment:

Inflation and interest rates climbed sharply and became harder to predict, a situ-

ation that changed demand conditions in financial markets. The rapid advance in

computer technology changed supply conditions. In addition, financial regulations

became more burdensome. Financial institutions found that many of the old ways

of doing business were no longer profitable; the financial services and products they

had been offering to the public were not selling. Many financial intermediaries found

that they were no longer able to acquire funds with their traditional financial instru-

ments, and without these funds they would soon be out of business. To survive in

the new economic environment, financial institutions had to research and develop

new products and services that would meet customer needs and prove profitable,

Access

http://www.fdic.gov/

bank/statistical/

to learn

about the number of

employees and the current

profitability of commercial

banks and saving

institutions.

G O   O N L I N E

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