The economics of money, banking, and financial markets

Inside the Fed boxes give students a feel for the operation and structure of the 

Federal Reserve.

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 Preface 

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End-of-chapter questions and applied problems, numbering more than 600, 

help students learn the subject matter by applying economic concepts.

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P A R T   3   Financial Institutions

partially addressed by either breaking up large financial 

institutions or by imposing higher capital requirements 

on them; (2) many of the provisions of the Dodd-Frank 

legislation; and (3) reform of the GSEs to make it less 

likely that they will require government bailouts in the 

future.

KEY TERMS

asset-price bubble, p. 271

credit boom, p. 269

credit default swaps, p. 276

credit spread, p. 274

debt deflation, p. 272

deleveraging, p. 269

financial crisis, p. 269

financial derivatives, p. 276

financial frictions, p. 269

financial innovation, p. 269

financial liberalization, p. 269

fire sales, p. 272

fundamental economic values, p. 271

haircuts, p. 279

leverage cycle, p. 284

macroprudential supervision, p. 284

microprudential supervision, p. 284

repurchase agreements (repos), p. 279

stress tests, p. 285

structured credit products, p. 275

systemically important financial 

institutions (SIFIs), p. 286

Troubled Asset Relief Program 

(TARP), p. 283

QUESTIONS

All questions are available in