... through extending credit; they provide loans that support consumption and investment spending; and they have long had a functional involvement with government through collecting taxes, dispensing government payments and other operations which closely tie them into the economic climate and policy-making. Cushman, p. 133). In the United States, banks are regulated through a dual banking system; they are governed at both the state and federal level. This was designed to give the states significant control over banks, and also to ensure that banks would be treated fairly as they expanded their operations across state lines. Regulatory agencies are responsible for gathering and evaluating the information necessary to assess the true financial condition of banks to protect the public against loss due to mismanagement, embezzlement or fraud through periodic examinations and/or audits. (Rose, p. 33). The main regulatory agencies at the federal level are the Comptroller of the Currency, the Federal Reserve System and ...

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