Chapter 20: Money and Financial Institutions - McGraw-Hill Introduction to Business

Bank of America Fined $150 Million by Federal Regulators

July 12, 2023

According to consumer watchdogs, for years Bank of America charged customers a variety of “junk fees” while also mishandling accounts. Not only did the financial giant withhold perks that were promised to some credit card holders, but it also double-charged overdraft fees and secretly opened cards in customers’ names without their knowledge. As a result, Bank of America received a $150 million fine from the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau (CFPB), which Continue reading →

Bank of America, Banking, Consumer Financial Protection Bureau, Ethics, Fraud, Regulation

Bonus Chapter A: Business Law, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 4: Ethics and Social Responsibility

[VIDEO] The Business Model Behind Buy Now, Pay Later Apps

July 6, 2023

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Retailers have long relied on credit cards and companies like Paypal to provide payment options for customers, but recently these services have faced some new competition. Firms like Affirm, Klarna, and Afterpay offer “buy now, pay later” models that can be an appealing alternative to credit cards. As the video below shows, though, these services could potentially be dangerous to consumers while also failing to maintain steady profits for investors.

Questions:

What are the potential advantages and disadvantages of using Continue reading →

Credit, Currency, Ecommerce, Ethics, Money, Payment services, Paypal, Retail

Chapter 13: Marketing, Chapter 14: Product and Price, Chapter 15: Distribution, Chapter 16: Place and Promotion, Chapter 17: Accounting, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 6: Entrepreneurship, Videos

[VIDEO] Why Hitting the Debt Ceiling Would Be ‘Catastrophic’

May 11, 2023

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Lawmakers are once again butting heads about raising the debt ceiling, a limit on the total amount of money that the federal government is authorized to borrow. This video looks at the potential economic consequences that could follow if legislators fail to reach an agreement and default on the nation’s debt.

Questions:

How does debt help drive the U.S. economy?
Why are U.S. bonds traditionally seen as reliable investments? How could that change if the country defaults on its debt?

Bonds, Debt ceiling, Economics, Ethics, Federal Reserve, Global, Regulation, Securities

Bonus Chapter A: Business Law, Chapter 19: Securities Markets, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 3: Globalization, Chapter 4: Ethics and Social Responsibility, Videos

[VIDEO] Apple vs. Banks: The Digital-Wallet War

April 13, 2023

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Since launching its digital payment system in 2014, Apple has steadily increased its market share in a space traditionally dominated by big banks. This video looks at how Apple Pay has frightened Wall Street stalwarts like JPMorgan Chase and caused financial institutions to expand their own digital payment efforts in order to compete.

Questions:

What advantages and disadvantages does Apple Pay have compared to traditional financial firms?
Do you prefer to pay with cards or digital platforms like Apple Pay?

Apple, Apple Pay, Credit Cards, Currency, Debit cards, Digital payments, Finance, Silicon Valley, Wall Street

Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Videos

[VIDEO] How the FDIC Insures Customers’ Deposits

March 24, 2023

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The Federal Deposit Insurance Corporation (FDIC) does not get much attention unless something goes drastically wrong in the financial world, such as the recent collapse of Silicon Valley Bank (SVB). This video explains how the organization covers customers’ deposits in order to prevent bank runs, and how the fall of SVB presented the FDIC with some unique challenges.

Questions:

Why was the FDIC formed, and how does it protect customers’ deposits?
How did the FDIC’s handling of the SVB collapse Continue reading →

Bailout, Economics, Ethics, FDIC, Federal Reserve, Financial Crisis, Regulation, Securities Markets, Stock Market, SVB

Bonus Chapter A: Business Law, Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Videos

[VIDEO] How SVB Collapsed in 36 Hours

March 16, 2023

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The video below provides an in-depth look at Silicon Valley Bank’s downfall, from its heavy investments in bonds to the bank run that has sent shockwaves through the market. (For more information on investigations into potential misconduct at SVB, check out this video.)

Questions:

How did SVB’s substantial investments in bonds backfire on the bank?
Do you think federal regulators should place limits on how much money banks like SVB can invest? Why or why not?

Banking, Ethics, FDIC, Federal Reserve, Financial collapse, Regulation, Stock markets, Supply & Demand

Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Videos

FDIC Intervenes after Silicon Valley Bank Failure

March 14, 2023

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Last Friday, a combination of imprudent decision-making and panicked customers led to the collapse of Silicon Valley Bank (SVB), a 40-year-old financial institution based in Santa Clara, California. The Federal Deposit Insurance Corporation (FDIC) stepped in to prevent further fallout, putting nearly $175 billion in customer deposits under the regulator’s control. SVB’s meltdown represents the second largest bank failure in U.S. history, and the largest one since the 2008 financial crisis. As a result of this chaotic situation, stock prices Continue reading →

Banking, Ethics, FDIC, Federal Reserve, Financial collapse, Regulation, Stock markets, Supply & Demand

Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility

Inflation Fears Sink Stocks to Lowest Point in 2023

March 1, 2023

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Last Friday, the stock market tumbled to its lowest point so far this year, with the S&P 500 falling for three weeks straight while the Dow Jones similarly slumped due to disappointing economic data. Investors expected inflation to decline more at the start of 2023, but experts say that it has actually re-accelerated in recent months. As a result, the Federal Reserve may continue to raise interest rates, a measure used to combat inflation that reduces the amount of Continue reading →

Federal Reserve, Global, Inflation, Interest Rates, Recession, Regulation, Securities Markets, Stock Market, Stock valuation, Supply & Demand

Chapter 19: Securities Markets, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 3: Globalization

Investors Lose Billions in Massive Crypto Exchange Collapse

November 16, 2022

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Few financial sectors are as volatile as cryptocurrency, with the price of bitcoin down by more than 60 percent since the start of the year. The coin’s recent drop can be directly attributed to the downfall of FTX, a crypto exchange once valued at more than $32 billion. Founded by Samuel Bankman-Fried, FTX attracted the interest of top venture capital firms who invested hundreds of millions in the seemingly promising project. The company purchased mainstream legitimacy with their immense capital, Continue reading →

Banking, Bitcoin, Cryptocurrency, Currency, Entrepreneurship, Ethics, Marketing, Promotions, Regulation

Bonus Chapter A: Business Law, Bonus Chapter B: Technology and New Media, Chapter 13: Marketing, Chapter 16: Place and Promotion, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 6: Entrepreneurship

[VIDEO] How Consumer Confidence Relates to Inflation

July 29, 2022

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Consumer confidence in the economy has taken a nosedive as prices climb higher due to rising inflation, potentially indicating that the U.S. is on the road to a recession. This video looks at how the government collects data on consumer confidence while also examining the ways that low economic expectations can further fuel inflation.

Questions:

Why does the government collect data on consumer confidence? What sort of questions do they ask participants?
How can declining consumer confidence potentially drive inflation even higher?

Consumer Confidence, Consumer Research, Economics, Federal Reserve, Focus Groups, Inflation

Chapter 13: Marketing, Chapter 14: Product and Price, Chapter 1: Taking Risks and Making Profits, Chapter 20: Money and Financial Institutions, Chapter 2: Economics, Videos