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Gavilanes 1

Israel Gavilanes
DeBock
English IV
March 18, 2015
Essential Question: How Banks manage credit?
Working Thesis: The Banks are institutions for profit scoring risk and managing it depending on
the individuals.
Refined Thesis: The banks manage credit by scoring individuals by their payment history
Banking Industry
McFarland, Robert E. Banking Industry. Salem Press Encyclopedia (2013): Research Starters.
Web. 18 Mar. 2015
This article is relevant because it provide a basic understanding of how banks work and
run by providing services to individuals for facilitating their payments to institutions, it also
states that the loans provided can range in any amount to provide the capital necessary for an
investment and create wealth. This article also states about the early history of banks which was
in Italy and then to America, but it was closed by the British government, the article also speaks
regarding that the banks have federal insurance for the deposits made by the people and be
protected in any case the bank fails to give back the money to the depositors. The article states
that the prospects for jobs are growing which is good for the economy.

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Yue, Lori Qingyuan, Jiao Luo, and Paul Ingram. "The Failure Of Private Regulation: Elite
Control And Market Crises In The Manhattan Banking Industry." Administrative
Science Quarterly 58.1 (2013): 37-68. Business Source Premier. Web. 18 Mar. 2015.

This article is relevant because it gives a briefly explanation of the banks crisis and
what are the reasons that lead the banks to fall among politic reasons, also states that sometimes
the system fails because of the elites that controls the banks, but they are being regulated in order
to prevent failures on the banking system, this article also talks about that the government
regulates banking for the general benefit because of past experience there was about banking
taking huge risks that lead to mistakes with the people money and the economy of the general
public falls leading the country to a financial crisis causing the people to be out of assets and
back up for a future when they need those assets to keep living.

Hao, Li, Debarshi K. Nandy, and Gordon S. Roberts. "Effects Of Bank Regulation And Lender
Location On Loan Spreads." Journal Of Financial & Quantitative Analysis 47.6 (2012):
1247-1278. Business Source Premier. Web. 18 Mar. 2015.
This article is relevant because it talks about how regulations can affect to the general public and
not make the things good but worsen them, since to many regulations causes the banks
to seek for people who manages the permits and licenses they need to keep operating,
and by hiring them the banks lose money and therefore they have to rise prices on fees
and tariffs for the consumer which takes money off of the customer and by doing so
affects the common economy, it also affects by taking small banks out of business since
they cannot afford to keep paying such fees to operate regular actions, therefore just the

Gavilanes 3
big banks get the customers and profits causing a bigger economic difference among
the citizens which is not the best thing for the economy.