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The erosion of Glass-Steagall allowed financial institutions to take advantage of: a) Economics...

Question:

The erosion of Glass-Steagall allowed financial institutions to take advantage of:

a) Economics of scale.

b) Economics of scope.

c) Interstate banking.

The Glass - Steagall Act:

The Glass - Steagall Act was a part of the Banking Act of 1933 which placed restrictions and controlled the kind of activities that commercial banks and investment banks could engage in The Act separated these activities to ensure that there is no chance of two businesses types to mix. This offered protection to the consumer's money from speculative use. However, the regulations crumbled when the institutions it was meant to regulate found means of weakening the barriers the legislation had put.

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The erosion of Glass-Steagall allowed financial institutions to take advantage of the economies of scope. The financial institutions managed to...

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