Part B: Essay – 1,000 words
The larger a bank the better is its ability to diversify. As a diversified portfolio of assets is a public
good, regulators should not limit the size of banks, despite the significant negative externalities
failures of large banks tend to impose on the public. Discuss. financial management
Assessment Criteria:
? Demonstrated knowledge of the nature of a bank, financial risks and asymmetric
information.
? Logical inferences drawn from information presented and appropriate justification of
stance taken.
? Overall presentation of the argument is relevant and appropriate
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