Question

Based on your readings, do you believe that the features of modern banking systems have made systemic banking crises a greater risk. Support your answer with at least one example

Answer 1

Banking crices are those crises which occure due to crises and liquidity and insolvency of one or bank in financial system.. It's is also occure when burden of loan increase on bank too.

No doubt every thing have both good and bad qualities.. No doubt modern banking systems is helpful in development of Bank but its some features some times effect the systemic banking badly.  

First here we clear systemic banking crises

Systemic banking crises:-it is that situation banking where country face many defaults. And financial institutions and corporation are found himself usable or face many difficulties to pay back contract demands.

Basically modern banking are those banking system which mostly work perform online and with help of net system.

Reason of bank crises

1)Bank run:-this systemic crises occure when Bank liquiduty are unable to meet consumer demand due to investment of all money by Bank in outside and when people find that Bank have no liquid or cash money for withdrawal it's make people panic and they start to withdraw money from their Bank due to this increasing skeptical. .and this cause a situation for Bank called Bank run.

2) stock market investment:- stock market is like a beauty contest program where investor are always try to pick what is attractive to other investor. Which create dramatically rise and falls condition of Bank it's make something Bank stock investment into huge loss .

3) governments oversight:- some crises are also occure dur to government oversight too which mostly occure when Bank take levarage often and often despite extremely high risk for increase it gain.

4) contagin:- when crises occure in economy and make it's collapse and internal damage it and due to this there depended economy are all also face problem is called contagin .some times contagin is also reason of systemic crises.

Example realated to this question are Bank run situation, levarage, liquidity etc.