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Question: a explain with simple examples how banks provide the following...

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a) Explain with simple examples how banks provide the following services to society: (8 marks) Transform risky assets into safe liabilities (e.g., safe deposits) Transform iliquid assets into liquid liabilities (e.g., liquid deposits) Transform long term assets into short term liabilities . Provide payment services b) Since the GFC many suggestions have been made to reduce the risk in the banking sector. One idea is so-called narrow banking. Already, one such bank has been created, TNB USA Inc. (The Narrow Bank) and its business model would have been to match all deposits immediately by 100% reserves at the FED (similar to ESF at RBA). The FED rejected this idea. Evaluate how useful TNB services are for society referring to the banking services from a). (7marks)
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